You own 100 shares of LUV stock. You wrote one call on LUV w…
You own 100 shares of LUV stock. You wrote one call on LUV with a strike of $70.90 when calls were trading at $9.50 and the stock was trading at $70.90. Now, LUV is trading at $63.00. The option will expire today. Identify this strategy. Why would an investor do this? What is the net profit/loss of this strategy? At what stock price does the strategy breakeven?