SIE practice questionhardOptions - Fiduciary Use
A fiduciary investing for a trust must avoid which options strategy?
- AWriting covered calls
- BBuying protective puts
- CBuying covered calls
- DWriting uncovered calls✓ Correct answer
Explanation
Why D — Writing uncovered calls
Writing uncovered (naked) calls exposes the trust to unlimited risk, which fiduciaries must avoid. Protective puts and covered calls limit risk and may be suitable if allowed by trust documents.
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