You own 200 shares of Allen Bros. stock. Which one of the following would allow you to receive an option premium in exchange for selling your shares in Allen Bros. at the strike price?
A)straddle
B)long spread
C)selling a put
D)buying a call
E)writing a covered call

Question

Quizplus · Accepted Answer

Writing a covered call involves selling a call option on shares that you already own. In this case, you own 200 shares of Allen Bros. stock and can sell a covered call option on those shares, which allows you to receive an option premium in exchange for giving someone else the option to buy your shares at the strike price.

You Own 200 Shares of Allen Bros