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intro to spreads

Intro to Spreads: Final Review

Recap concepts related to two-legged strategies and defined risk

Covered Calls

  • Covered calls are a bullish strategy
  • They can be replicated using naked short puts
  • Each call MUST be accompanied by a minimum of 100 shares for it to count as a true covered call
  • Covered calls have limited profit potential
  • The lower the call delta, the lower the POP, but the greater the profit potential
  • Covered calls can be a great way to improve cost basis without adding additional risk to the position

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intro to spreads
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