No. of Recommendations: 0
Is there any scenario in which the Put is superior to the buy-write Call?First step is gathering up all the correct numbers.
Buy stock, sell call:
Buy share at 470 -470
Sell 500 call at 25 25
Interest on 445 @ 4.2% (10/12) -15.58
Deliver stock in June '26 500
NET GAIN 39.42
PERCENT GAIN = 39.42 / 445 = 8.86%
Sell cash covered put:
Sell 500 put at 39 39
Retain 500 secured cash
Interest on 539 @ 4.2% (10/12) 18.87
Put expires worthless in June '26
NET GAIN 57.87
PERCENT GAIN = 57.87 / 461 = 12.55%
Am I missing some cash flows here? In theory, selling a 500 put and doing a buy stock/sell call should have roughly equivalent results. I think. Or maybe the prices given for these options are not correct?
