Call selling gains popularity

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Fears of recession and increased volatility have led to the return of strategic overwriting strategies - the selling of call options to gain extra yield.

The strategy, which was popular at the start of the decade, had all but disappeared amid the low volatility and rising markets of the past few years. But a plunge in equity markets at the start of the year, combined with high implied volatilities, has convinced some sell-side houses to recommend the strategy to clients looking for yield.

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