: Used by investors who are bullish but want a "margin of error" before the put obligation kicks in. Key Risks to Consider
The strategy of is known as a Synthetic Long Stock position when both options have the same strike price, or a Risk Reversal when they have different strike prices. This strategy mimics the risk and reward profile of owning the underlying stock but with significantly less capital. Core Papers and Resources sell put and buy call strategy
: Sell an Out-of-The-Money (OTM) put and buy an OTM call. : Used by investors who are bullish but
: Sell an At-The-Money (ATM) put and buy an ATM call. Core Papers and Resources : Sell an Out-of-The-Money
: Replicate 100 shares of stock performance with minimal upfront cost.
: You have unlimited upside but also face "uncapped" downside risk identical to owning the stock. Risk Reversal (Different Strikes) :
: Often established for a net credit or zero cost, as the put premium sold typically covers the call premium bought.