I was having lunch with a fellow trader friend of mind and we brought up something interesting. He kept arguing that selling a vertical has same risk as initiating a covered call. I thought he was nuts. He cited an example selling an OTM SPX vertical and using the return on margin as the same as a return on a stock's call. He said that the worst case is already limited at the end of the vertical where one buys the option. In a covered call, the worst is the stock goes to zero. But I asked him what if you purchased a high priced stock, say around $100/share? Well he kept saying that one could lose that much in the margin requirement in the vertical if it's structured that way. I'm still not sure, I've done OK with covered calls, never initiated a short vertical. Well, I know the good folks on Elite Trader could clarify this for me. Any help here would be greatly appreciated.