An equity security in which a buy-write is embedded directly into the equity investment and as such doesn’t require from the holder to involve in trading options. This security is based on two positions: one in an equity security and another in a call option on that security.

The earliest versions of buy-write securities appeared in the first half of the 1980s, and attracted popularity in the late 1980s. These instruments are based on the premise that underlying equities consist of two separate components: one that pays dividends and another one that pays capital gains. Though holding such a security is generally viewed as low-risky (the embedded short option is covered by sufficient shares which can easily cover the liability in the event of exercise), it still has risks, especially that arising from a potential underperformance by the equity versus the naked equivalent.

Examples of buy-write securities include PERCS, MCPDPS, DECS, YES, PRIMES, SCORES, etc.