Series 7 - General Securities Representative Exam

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An investor owns 1500 shares of an underlying stock. How many calls can he sell against his position while remaining fully covered?

16
A
15
B
25
C
30
D

Explanations

Each call represents 100 shares of the underlying stock. Since he owns 1500 shares, he can sell 15 covered calls against his shares. Any sold calls above 15 would be naked calls

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