An investor who writes standard call options against stock held in his or her portfolio is said to be selling what type of options?

Question

Quizplus · Accepted Answer

Selling standard call options against a stock held in an investor's portfolio is known as covered call writing. This is because the investor owns the underlying stock, which covers their obligation to sell the stock at the strike price if the option is exercised. Therefore, the correct choice is C) covered. Put options are not relevant to this scenario, and selling naked options would involve not owning the underlying stock, which is not the case here. Out-of-the-money and in-the-money refer to where the strike price is relative to the stock price, but they are not relevant to the type of options being sold.

An Investor Who Writes Standard Call Options Against Stock Held