An investor who writes stock call options in his own portfolio is classified as__________?
Correct answer: A. Covered option
- A. Covered option
- B. Due option
- C. Undue option
- D. Uncovered option
Explanation
Writing a call while owning the underlying stock is a covered call, because the shares are available to deliver if the option is exercised. Writing a call without owning the shares would be an uncovered or naked call.
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