What happens if you sell short calls and they become deep in-the-money?   A. You risk being assigned to buy the stock.   B. Your broker may tell you to immediately cover your short calls.   C. You risk assignment any time your short calls are deep in-the-money prior to expiration.   D. You can just buy an equal number of puts to cover your short calls.

Personal Finance
13th Edition
ISBN:9781337669214
Author:GARMAN
Publisher:GARMAN
Chapter14: Investing In Stocks And Bonds
Section14.4: Buying And Selling Stocks
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What happens if you sell short calls and they become deep in-the-money?

 

A. You risk being assigned to buy the stock.

 

B. Your broker may tell you to immediately cover your short calls.

 

C. You risk assignment any time your short calls are deep in-the-money prior to expiration.

 

D. You can just buy an equal number of puts to cover your short calls.

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