Covered call vs. short in-the-money put?

Discussion in 'Options' started by crgarcia, Aug 28, 2008.

  1. With the short put you pay only one commission.

    With the covered call you may make an easier emergency exit, if the market goes south; selling the futures (or ETFs) which have higher liquidity and volume than put options.

    Any other advantages/disadvantages?
  2. Personally, I HATE covered calls. I just prefer short puts as opposed to CC's, but that's me. One simple sale. It seems the covered call strategy is for people just dipping their toe in the options water.
    Also, it is no harder to hedge a short put.
  3. MTE


    You can sell futures/etfs to hedge a short put just as well. The only difference is that in a cc you sell an existing position and with a put you create a new short position. And I wouldn't even recommend a cc to a beginner since it has an awful risk/reward - limited upside and "unlimited" downside.