Covered call writing is a popular investing strategy where investors sell out-of-the money call options against...

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Covered call writing is a popular investing strategy where investors sell out-of-the money call options against an existing long stock position in order to generate option premium income. Wildwood Corp Underlying Stock price: $50.00 Expiration June June June $21.50 Consider a scenario where you bought Wildwood Corp. stock in the past for $31 per share. The stock now trades at $42 per share and you're not sure how much more upside it has and decide to use the June $50 strike Call in a covered call-write strategy. $15.50 If, at option expiry in June, Wildwood Corp stock is trading at $48 per share and you sell it at that price and the option expires, then what was your total return from holding this position incl. the option strategy? $12.50 Strike 45.00 50.00 55.00 $15.00 Call 8.50 4.50 2.00 $17.00 Put 2.00 3.00 7.50 Covered call writing is a popular investing strategy where investors sell out-of-the money call options against an existing long stock position in order to generate option premium income. Wildwood Corp Underlying Stock price: $50.00 Expiration June June June $21.50 Consider a scenario where you bought Wildwood Corp. stock in the past for $31 per share. The stock now trades at $42 per share and you're not sure how much more upside it has and decide to use the June $50 strike Call in a covered call-write strategy. $15.50 If, at option expiry in June, Wildwood Corp stock is trading at $48 per share and you sell it at that price and the option expires, then what was your total return from holding this position incl. the option strategy? $12.50 Strike 45.00 50.00 55.00 $15.00 Call 8.50 4.50 2.00 $17.00 Put 2.00 3.00 7.50

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WORKINGS Total return from holding this position inclu... View the full answer