Which of the following describes a covered call writing?
A)buying call options while owning the underlying asset.
B)buying put options while owning the underlying asset.
C)selling call options while owning the underlying asset.
D)selling put options while owning the underlying asset.

Question

Quizplus · Accepted Answer

Covered call writing involves selling call options while owning the underlying asset. This strategy is used to generate income from the premiums received from selling the call options, while also potentially benefiting from any increase in the value of the underlying asset. Option A involves buying call options, which is a different strategy, while options B and D involve buying put options and selling put options respectively, which are also different from covered call writing.

Which of the Following Describes a Covered Call Writing