One advantage associated with selling (i.e., writing) a call option includes a. potential leverage. b. income...
One advantage associated with selling (i.e., writing) a call option includes
|
a. |
potential leverage. |
|
|
b. |
income from collecting dividends. |
|
|
c. |
income from the sale of the option. |
|
|
d. |
increased potential for capital gains. |
Homework Answers
Correct option is > c. income from the sale of the option.
Reason:
Income from sale of option i.e. collection of premium which is instant income. However, the option seller is exposed to risk of adverse price movement.
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One advantage associated with selling (i.e., writing) a call
option includes
a.
potential leverage.
b.
income...
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