A covered call means
A) the investor also owns a protective put.
B) the investor is also short the stock.
C) the investor has a paper gain in the underlying stock.
D) the investor is simultaneously long the underlying stock.

Question

Quizplus · Accepted Answer

A covered call strategy involves an investor being long on the underlying stock while simultaneously selling a call option on the same stock. This means the investor owns the stock and sells the right for someone else to buy it at a specific price within a certain time frame.

A Covered Call Means