USE COVERED CALL OPTION STRATEGY

You run a mutual fund and you have decided that the most that Tiaga stock is worth is $30 and you plan on selling the stock when it reaches that point. What option strategy could you take to make an additional profit on your planned trade?

Covered call

Using the following information calculate the portfolio value on the exercise date and the profit from your strategy.

Stock Price Today = $28.22

Strike Price = $30

Call Price = $2.54

Put Price = $3.35

Scenario 1. Taigas stock price rises to $30 on the exercise date.

Scenario 2. Taigas stock price falls to $15 on the exercise date.