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.

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter14: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 5LTAI

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Question

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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