Selling Options on Stock You Already Own

question 7

Multiple Choice

Selling options on stock you already own

• A) is illegal under federal law.
• B) cannot benefit you financially.
• C) is called a covered call strategy.
• D) is not a very good idea.

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Definitions:

Co-owners

Individuals or entities who jointly own an asset or property, sharing the rights and responsibilities associated with ownership.

Business for Profit

An enterprise or entity engaged in commercial, industrial, or professional activities with the aim of generating financial returns for its owners or shareholders.

Fiduciary Duty

A legal obligation of one party to act solely in the interest of another party, such as a trustee to a beneficiary or a corporate board member to shareholders.

Legal Entity

A legal entity refers to any company or organization that holds legal rights and responsibilities, including the ability to enter into contracts, sue, and be sued.