You may experience cases where a contract option is not enabled for short-selling. In such cases, you will receive the following error message:
"You are only allowed to sell call options as part of a covered call strategy on high-risk rating securities."
This issue is connected to the rating of the contract option. If the rating of a contract option is 6, then it is only possible to short-sell it as part of a covered call if you possess the sufficient stocks to cover.
Why can't I sell stocks that are a part of a covered call?
If you hold a covered call strategy and attempt to sell the stocks that are designated to cover the short call, you will encounter a rejection with the following reason:
"Closing underlying position used in a covered call strategy is not allowed for high-risk rating security. Close the short call option(s) first."
If you wish to close the stock position that covers the short call in the covered call strategy, you should close short call options first.
Where can I view the rating of an instrument?
You will always be able to find the rating of an instrument in the Trading Conditions under Instrument.
The rating is determined by Saxo with rating 6 being the lowest rating possible (lowest in this context means most risky). A significant part of the rating depends on the market capitalization, liquidity, volatility, country of incorporation, industry and M&A Activity of the underlying instrument.