Options Question
When I write puts..can Icover with a same-month call?
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When I write put..can I cover with a same-month call?
Answers
176 points
JPL answered 2 months ago …
Hi, 24kcafe,
Welcome to the club!
I presume it’s the short stock that you want to cover, then the call should have sufficient longevity until you disposed of your short stock.
If your broker allows it, it would be better to sell a naked put, and if you want to cover that, then buy a lower strike priced put for the same month. This would reduce commissions and avoid messing with the stock.
Hope the above helps.
JPL
9-22-2009
