With a covered call strategy, an advantage of selecting a low strike price for the call...

Question

Question

With a covered call strategy, an advantage of selecting a low strike price for the call option is:

A. it’s more likely to expire out-the-money than a call with a higher strike price

B. it costs less to buy than a call option with a higher strike price

C. the cash inflow from the premium is higher than for a call option with a higher strike price

D. the maximum profit is greater than for a call option with a higher strike price

Answer 1

Answer #1

With a covered call strategy, an advantage of selecting a low strike price for the call option is:

ANSWER =

D. the maximum profit is greater than for a call option with a higher strike price

Answer 2

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