Covered Calls vs. Naked Puts

Discussion in 'Options' started by aradiel, May 4, 2010.

  1. I'm not sure either, because your edits haven't helped. Anyway, it didn't require 17 pages to come to the conclusion that CC = short put.
     
    #81     May 6, 2010
  2. aradiel

    aradiel

    CCs have a carry cost, short puts not and there are differences between extrinsic value recieved by the two. That is a very relevant difference, specially to the retail investor, who wont be able figure or execute the oportunity cost play properly.
     
    #82     May 6, 2010
  3. Please stfu.
     
    #83     May 6, 2010
  4. aradiel

    aradiel

    go bitch somewhere else, bitch.
     
    #84     May 6, 2010
  5. Nice, you used bitch twice in the same sentence. Options must be new in the third world, as of yesterday you couldn't spell "put"
     
    #85     May 6, 2010
  6. aradiel

    aradiel

    oh he used the "third world" card... banana republic wouldnt be original as well but at least it would be way more funny!

    bitches keep bitching...
     
    #86     May 6, 2010
  7. Will people please just stop saying a CC is less risky than a NP... they are the same damn payoff. Limited upside with unlimited downside (fine it's not technically unlimited, just till the stock goes to zero, but that's pretty damn close).

    It doesn't matter whether its a CC and you own the stock... its the SAME PAYOFF!!!
     
    #87     May 7, 2010
  8. spindr0

    spindr0

    Sorry to be the bearer of bad news but amateurs and noobs cannot compute equivalence.
     
    #88     May 7, 2010
  9. As been stated many times CC/NP are the same risk scenario, BUT

    The reason why CC's are better then NP's is that retail investors who use NP's tend to blow out their accounts at a much higher rate.

    Owning something and having to pay for it upfront makes people take less risk.

    Talk to any customer service rep at any of the retail brokerage houses and they will confirm what I said.
     
    #89     May 7, 2010
  10. MTE

    MTE

    This is probably true, but it relates to human psychology not options per se.
     
    #90     May 7, 2010