A Call Option Written Against Stock Owned by the Writer

question 4

Multiple Choice

A call option written against stock owned by the writer is said to be:

• A) naked.
• B) in the money.
• C) out of the money.
• D) covered.

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Definitions:

Market Demand

The total quantity of a good or service that all consumers in a market are willing and able to purchase at various price levels.

Marginal Cost

The supplementary expense required to manufacture an additional unit of a product or service.

Crude Oil Price

Refers to the cost per barrel of unrefined petroleum, which fluctuates based on global supply and demand dynamics, geopolitical tensions, and market speculations.

Cheat

An act of dishonesty or unfairness to gain an advantage.