Selling a call on a share of stock you already own is a _________.
A) covered call
B) protective call
C) spread
D) straddle
E) strap

Question

Quizplus · Accepted Answer

Selling a call on a share of stock you already own is known as a covered call. This strategy is commonly used to generate income on a stock position while providing some downside protection. If the stock price rises above the strike price of the call option, the stock may be called away from the investor, resulting in a profit from the sale of the stock at the strike price plus any option premium received.

Selling a Call on a Share of Stock You Already