Are these Opt order types similar ?

Hi guys,

Is there something such as a covered put similar to a covered call ?

And is there a difference between a covered opt position (call or put) on stock and one on a Fut contract as ?

Thank you

 

Is there something such as a covered put similar to a covered call ?

Yes, A covered call is nothing more than a synthetic put. So a synthetic call would be a covered put. Although I have never heard the term used.

And is there a difference between a covered opt position (call or put) on stock and one on a Fut contract as ?

Optionality-wise - 97.3462% No. The difference is interest rate effects.

-welcome.

 

It’s called a “married put” if you are long stock and long a put.

 

Oh yeah, that's right. I gave up on trying to remember the names of things with conversions/reversals. I preferred to refer to them as - "Do you want the put or the call"

 

I was the same way. Whenever someone would trade a coversion I would ask which side is buying stock.

 

Covered Call:
Long 100 XYZ and sell 1 call

Covered Put:
Short 100 XYZ and sell 1 put

***Futures would be the same except you'd sell 1 call/put for each futures contract long/short.

 

Covered call is equivalent to selling naked put at the same strike.
Covered put is equivalent to selling naked call at the same strike.
So you really don’t need to get confused with “covered” anything. Simply sell puts or calls, naked.

 

Your broker will be happy to execute a covered call for you but refuse to allow you to trade naked put. So to your broker, they are very different, one low risk the other high risk.

 

If your broker tells you one is low risk and the other high risk then maybe someone should explain to them why they have the same $$ risk.