SIE practice questionmediumAccount Types: Options Strategies
A customer in an options account writes a covered call. What must the customer own?
- AA T-bill maturing after expiration
- BA corresponding put option
- CNothing prior to writing the call
- DThe underlying stock✓ Correct answer
Explanation
Why D — The underlying stock
A covered call is written when the customer owns the underlying stock. B is a different strategy. C is incorrect—ownership of the stock “covers” the call. D is unrelated.
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