Selling a naked put (or cash-secured put) is the same as selling a covered call. They have identical profit and loss graphs if you use the same strikes and expiration dates. However, there are a few differences that may make naked puts more or less attractive than covered calls depending ...
Selling puts: A stock accumulation strategy Short calls and covered calls The pros and cons of strategic option selling The bottom line Read More Selling call and put options: A guide to the risks and rewards Option strangles and iron condors: Targeting movement but not direction Intro to option...
Bull Call Spreads [Debit] Bull Put Spreads [Credit] Bear Call Spreads [Credit] Bear Put Spreads [Debit] Single-Leg Strategies Covered CallsNaked PutsLong CallsLong Puts Calendar Spreads Debit Calendar CallDebit Calendar Put Multi-Leg Trades ...
Married Puts(loss guaranteedless than 5%, even if stock drops to zero!) CC "Hedge-fund"(create aself-protecting investment vehiclewith the QLD/QID combo...first taught here!) ITM CC plays..."in-the-money" CC data for larger downside protection ...
Weighing the risks vs. benefits Because a trader selling a covered call might be giving up the potential for additional profits if stock XYZ rises above the strike price, the strategy is not appropriate if one thinks the stock has potential for significant gains in the near term. But in mark...
s underlying security. Aput optionconfers to the buyer the right to sell short a specified amount of the underlying security at the option strike price before the option’s expiration. Just as with a call option, the buyer pays a premium to the seller of the option. The premium received ...
trying to time when stocks and markets will be flat or down is extremely difficult, particularly given the long-term upward bias of the equity markets. As such, there is a hidden cost of covered call writing, which is the potentially significant opportunity cost of having the stock go above...
The strategy involves the use of covered call writing,leveraged ETFs,weekly optionsand protective puts. Let’s first define the latter three terms. Definitions Leveraged ETFs: Exchange-traded funds that use financial derivatives (like options) and debt to magnify the returns of an underlying inde...
A covered call involves taking a short position in a call option on a stock you own, typically at a strike price that’s out of the money (i.e., higher than where the stock is currently trading). The strategy is also called a buy-write strategy, because in options lingo, to “write...
the writer must be able to produce 100 shares for each contract if the call expires in the money. If they do not have enough shares, they must buy them on the open market, causing them to lose even more money.