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CWM Financial Markets > Options Help > Flashcards

Options Help Flashcards

1
Q

What do you own in a covered call?

A

The stock

and you’ve sold a short

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2
Q

Why is your profit limited in a covered call?

A

You will always be limited to what you sell your share for (to the call holder) plus the premium

Minus the initial share price

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3
Q

Payoff Chart for a Covered Call

A

Unlimited risk line to flat profit

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CWM Financial Markets (58 decks)

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