Bubba owns 200 shares of XYZ at $90, and wishes to hedge the position while generating income. What is the best recommendation?

Name: Bubba owns 200 shares of XYZ at $90, and wishes to hedge the position while generating income. What is the best recommendation?
Brand: Quizplus
Rating: 4.9 (42 reviews)

Question

Quizplus · Accepted Answer

sell calls. Calls are covered by the underlying stock. If the calls were exercised, the stock would be delivered to meet the obligation. The income also reduces the break-even of the stock.

Bubba Owns 200 Shares of XYZ at $90, and Wishes