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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: FaultLine who wrote (1033)6/11/2001 9:44:01 PM
From: hivemind   of 5205
 
Yes indeed. ITM short puts having common go above strike is max profit, same as buy-write. You are taking an aggressive bullish position. If you sell way ITM puts you get very little time value; nearly identical to buy-write with way OTM short calls. both positions are very close to long stock alone, except for that teeny preemie.

Note reminder: At parity, calls with always sell for more than puts. This has to do with interest rates which are pretty low now. In theory one wants to earn money market rates on the cash collateral securing the puts. Or hold t-bills to same effect over life of position.
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