Assume that you purchased shares of ABC stock at $50 per share with the intention of selling
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Assume that you purchased shares of ABC stock at $50 per share with the intention of selling them in 3 months. You consider applying the covered call writing strategy to hedge (somewhat) your position in the stock. The exercise price is $55, the premium on the call option is
$2.50, and the expiration date is in 3 months. What would be the profit/loss situation if the strategy is used based on the following possible stock prices (40, 45, 50, 55, 60, 65)?
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Related Book For
Understanding Investments Theories And Strategies
ISBN: 9780367461904
2nd Edition
Authors: Nikiforos T. Laopodis
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