Say you then decide to sell 1 call option on Company A through your account, but your account will only let you do this if you already own the stock (a “covered call”), so you buy 500 shares of Company A and then proceed to sell a call option on Company A. Say this short call option expires in-the-money. What does in-the-money mean in this context?
Say you then decide to sell 1 call option on Company A through your account, but your account will only let you do this if you already own the stock (a “covered call”), so you buy 500 shares of Company A and then proceed to sell a call option on Company A. Say this short call option expires in-the-money. What does in-the-money mean in this context?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Say you then decide to sell 1 call option on Company A through your account, but your account will only let you do this if you already own the stock (a “covered call”), so you buy 500 shares of Company A and then proceed to sell a call option on Company A.
Say this short call option expires in-the-money. What does in-the-money mean in this context? I'm pretty confused about this.
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