One question came to my mind which strategy is better at any point of time , Covered put OR Selling naked ATM call. I toggled both strategies with option oracle but did not find to much difference between two regarding Max. profit, BEP etc. So why people prefer covered strategy . I believe that I am missing some valuable points for which people prefer covered strategy.Regarding covered put , I want to mean Selling Future ( not share) and selling ATM Put. My purpose to gain some insight regarding above strategy specially covered put,when should I go for covered put than to sell a call . Hope members of this forum will provide their valuable views and will get a healthy discussion.
I am just giving an example of nifty
1) Strategy 1--Covered put -sold I lot nifty future @5944 , sold one lot 5900 put @ 134, max profit--8700, upper protection--6074 , If nifty tomorrow goes above 6210 ( my SL) , loss will be 9500/-.
2) Strategy 2--Selling naked call 5900 @ 178 , MAx profit--8900 , upper protection 6080 , If nifty tomorrow goes above 6210( my SL) , loss will be 9900/-.
so result in both cases more or less same.Now should I prefer one over another is so why OR I can opt any one!!
I am just giving an example of nifty
1) Strategy 1--Covered put -sold I lot nifty future @5944 , sold one lot 5900 put @ 134, max profit--8700, upper protection--6074 , If nifty tomorrow goes above 6210 ( my SL) , loss will be 9500/-.
2) Strategy 2--Selling naked call 5900 @ 178 , MAx profit--8900 , upper protection 6080 , If nifty tomorrow goes above 6210( my SL) , loss will be 9900/-.
so result in both cases more or less same.Now should I prefer one over another is so why OR I can opt any one!!
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