The following diagram shows the profit to an option strategy called covered call. By looking at...
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The following diagram shows the profit to an option strategy called "covered call". By looking at the profit diagram, you can infer that this "covered call" is constructed by Payoff and profit (C) Covered call X -(50-C) X Buy a put option and the underlying stock Payoff Profit ST The following diagram shows the profit to an option strategy called "covered call". By looking at the profit diagram, you can infer that this "covered call" is constructed by Payoff and profit (C) Covered call X -(50-C) X Buy a put option and the underlying stock Payoff Profit ST
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