Which of the following statements about a covered call writing strategy is true?
a. the losses are limited
b. return and risk are greater than that of simply holding the stock
c. it is a cheaper form of insurance than a protective put
d. it generally makes a large number of small profits
e. none of the above
Answer: D
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Basic Option Strategies
- A synthetic short put position can be created with which of the following sets of transactions.
- A synthetic long call position can be created with which of the following sets of transactions.
- Identify the correct statement related to the choice of exercise price for buying a call.
- Which of the following investors may be obligated to buy stock?
- The difference in profit from an actual put and a synthetic put is
- Which of the following is the breakeven for a protective put?
- Which of the following strategies has essentially the same profit diagram as a covered call?
- Which of the following strategies has the greatest potential loss?
- Each of the following is a bullish strategy except
- Early exercise imposes a risk to all but one of the following transactions.
- Which of the following is equivalent to a synthetic call?
- Which of the following transactions does not profit in a strong bull market.
- Which of the following statements is true about closing a long call position prior to expiration relative to holding it to expiration?
- Consider two put options differing only by exercise price. The one with the higher exercise price has
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