Selling a call option on stock which you own is referred to as which one of the following strategies?
A)covered call
B)naked call
C)protective put
D)underlying put
E)straddle

Question

Selling a call option on stock which you own is referred to as which one of the following strategies?
A)covered call
B)naked call
C)protective put
D)underlying put
E)straddle

Quizplus · Accepted Answer

Selling a call option on stock which you own is referred to as a covered call strategy. This is because the call option is "covered" by the underlying stock. A naked call strategy involves selling a call option without actually owning the underlying stock, which carries more risk. Protective put and underlying put strategies involve buying put options, not selling call options. A straddle strategy involves both buying a call option and a put option at the same time.

Selling a Call Option on Stock Which You Own Is