SIE practice questionhardOptions - Covered Call
Writing a covered call involves:
- ASelling a call without owning the underlying
- BSelling a call while owning the underlying stock✓ Correct answer
- CBuying a put while shorting stock
- DWriting a call and a put on the same security
Explanation
Why B — Selling a call while owning the underlying stock
A covered call requires stock ownership. Selling calls naked, buying puts, or writing both call and put are different strategies.
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