Anthony @ Equity Investigations, Dear Anthony, Message Board

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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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To: George Cowsar who wrote (60880)	10/19/2000 9:27:12 AM
From: Tatnic	Read Replies (2) of 122087

>>>Finally, you can sell a call, to pay for your put (this is equivalent to shorting), your upside loss is not limited since the call you sold will continue to go against you as the stock rises. Consider this only if you can't short the stock (not available to borrow). Your transaction cost is a little higher than shorting since you pay two commissions and two spreads.<<< That strategy is typically used to protect a long position. To protect a short position you would sell a put and buy a call. The idea is to have a net cost of zero to implement the positions. If the stock tanks below your put strike you lose your short position and the value of the call, but make a little on the short and keep the amount of the put sale.

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