No. of Recommendations: 0
What I find interesting is that most people I talk to on the options discussion boards that do both strategies choose different strike prices for each strategy, even though they are more or less the same thing at any given strike price

The risk profile and max loss for the two positions are the same - cost of the stock minus commission received, but people use different strike prices for the covered call vs. naked put because generally you want to sell the closest OTM call or put. In almost all cases the closest OTM call is at a different SP than the closest OTM put.

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.