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Tag Archives: put-call parity
risk-reward profiles for covered call writing and put-selling

Comparing Covered Call Writing and Selling Cash-Secured Puts

An accepted myth is that covered call writing and selling cash-secured puts are precisely the same strategy. The reason this statement is generally accepted by many investors is that they have the same risk-reward profiles or profit and loss graphs:   In this article, other similarities will be discussed as well as some distinct differences […]

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moneyness of options impacting option prices

Moneyness of Options: Why Call and Put Premiums for the Same Stock, Strike and Expiration can be so Different/ CONTEST DEADLINE IS NOVEMBER 30th

Option trading basics teaches us that the concept of put-call parity means that for every call option price, the corresponding put option (same stock, strike and expiration) will have an implied value. For example, if Company BCI is trading at $50.00 per share, if the $50 call option generated $1.50, the put option would also be […]

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put and call option pricing

Put-Call Parity and Synthetic Trades: Understanding Option Pricing

When we sell covered calls or cash-secured puts we understand the factors that go into the premiums we receive: The option’s exercise price The current price of the underlying The risk-free interest rate over the life of the option Dividends, when applicable The amount of time remaining until expiration The volatility of the underlying It […]

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Put-Call Parity: Understanding Option Pricing

One of the mission statements of The Blue Collar Investor is to share information so that we can master option trading basics and become better investors. Many times I will research and write an article based on inquiries from our members and that is why I am able to continue to write weekly articles year […]

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