标题: downside protection of covered call [打印本页]

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作者: DoubleDip    时间: 2011-7-11 20:09     标题: downside protection of covered call

Covered call = Long stock + short call option.

Other than the premium received for short call, is there any downside protection offered.

From answer explanation to a question in one of the sample exam, it says covered call offers limited downside protection.

Just want to make sure that the downside protection is limited to the amount of premium received.

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作者: Windjam    时间: 2011-7-11 20:09

I remember that. I think u are correct. Its a tricky question. But they are refering to the premium

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作者: canadiananalyst    时间: 2011-7-11 20:09

Yes the downside protection is limited to the premium.

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