Which of the following statements about a covered call writing strategy is true?
A)the losses are limited
B)return and risk are greater than that of simply holding the stock
C)it is a cheaper form of insurance than a protective put
D)it generally makes a large number of small profits
E)none of the above

Question

Quizplus · Accepted Answer

A covered call writing strategy involves selling call options on a stock that you already own. This strategy typically generates small profits from the premiums received from selling the calls, especially if the stock price remains stable or increases slightly without exceeding the strike price.

Which of the Following Statements About a Covered Call Writing