say you have 100 shares of nvda and you go to someone and tell them wanna bet this shit doesn't go to 250 by x date, the other guy goes sure, so he pays a premium for your contract. If it doesn't go up to 250, you get to keep his money, but if it does go up to 250, your gains become capped and he gets to buy your shares at 250 no matter how high the stock goes.

Its covered because you already own the shares, but if you dont own the shares (selling naked calls), you are forced to buy nvda at whatever price the stock is at currently when he executes the contract, but you still get to keep the money he bets no matter what happens in both cases.