SIE practice questionmediumOptions
A customer owns 100 shares of ABC stock and sells a call against it. What is the name of this strategy?
- ANaked call
- BProtective put
- CCovered call✓ Correct answer
- DCovered put
Explanation
Why C — Covered call
Writing (selling) a call against owned stock is called a covered call, designed to generate income. A protective put is a put purchase for downside protection. Naked calls are uncovered. Covered put is not a recognized strategy.
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