Which of the following describes a covered call?
A. A long call option on a stock plus a long position in the stock
B. A long call option on a stock plus a short put option on the stock
C. A short call option on a stock plus a short position in the stock
D. A short call option on a stock plus a long position in the stock
D
A covered call consists of a short call plus a long position in the stock. Then the owner of the position has the stock ready to deliver if the other side exercises the call.
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