The writer of a covered call cannot lose money if the price of the stock rises.

Question

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The writer of a covered call has sold a call option, which gives the buyer the right to buy the stock at a certain price. If the price of the stock rises, the buyer of the call option will exercise their right to buy the stock at the lower price, and the writer of the call option will be obligated to sell the stock at that price. This means that the writer of the call option will not lose money if the price of the stock rises.

The Writer of a Covered Call Cannot Lose Money If