A covered call is the sale of a call option when no shares of the stock are owne
ID: 2784585 • Letter: A
Question
A covered call is the
sale of a call option when no shares of the stock are owned.
purchase of both a call and a put on a stock at the same exercise price.
sale of both a call and a put on a stock at the same exercise price.
sale of a call option on shares of stock already owned.
sale of a call option on a stock that was purchased with a put.
1.sale of a call option when no shares of the stock are owned.
2.purchase of both a call and a put on a stock at the same exercise price.
3.sale of both a call and a put on a stock at the same exercise price.
4.sale of a call option on shares of stock already owned.
5.sale of a call option on a stock that was purchased with a put.
Explanation / Answer
A Covered call is the option where,
Means cover call is, when we purhcase both the call and put option at the same time.
Answer = Option 2 = purchase of both a call and a put on a stock at the same exercise price.
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