Question: If the stock rises above $ 1 0 2 : The call buyer will exercise the option they ll buy the stock from you at
If the stock rises above $:
The call buyer will exercise the option theyll buy the stock from you at $
You must sell your stock at $ even if its worth more say $
You miss out on gains beyond $ but:
You still gain $ per share from the stock $ $
And you keep the premium from selling the call
So the loss on the call you have to sell the stock below market value is offset by your gains on the stock.
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