You want to set up a covered call position on 1,000 shares of XYZ stock. Your goal is to collect the greatest premium, and you don't mind being assigned. Which of these would you probably do if XYZ were trading for $40 per share? A. Buy 10 calls on XYZ stock with a strike price of $25. B. Sell 10 calls on XYZ stock with a strike price of $30. C. Sell 10 calls on XYZ stock with a strike price of $45. D. Sell 10 puts on XYZ stock with a strike price of $50.
You want to set up a covered call position on 1,000 shares of XYZ stock. Your goal is to collect the greatest premium, and you don't mind being assigned. Which of these would you probably do if XYZ were trading for $40 per share? A. Buy 10 calls on XYZ stock with a strike price of $25. B. Sell 10 calls on XYZ stock with a strike price of $30. C. Sell 10 calls on XYZ stock with a strike price of $45. D. Sell 10 puts on XYZ stock with a strike price of $50.
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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You want to set up a covered call position on 1,000 shares of XYZ stock. Your goal is to collect the greatest premium, and you don't mind being assigned. Which of these would you probably do if XYZ were trading for $40 per share?
A. Buy 10 calls on XYZ stock with a strike price of $25.
B. Sell 10 calls on XYZ stock with a strike price of $30.
C. Sell 10 calls on XYZ stock with a strike price of $45.
D. Sell 10 puts on XYZ stock with a strike price of $50.
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