This strategy is for investors looking for an alternative for short selling (a share or an index).
To buy the put option, you must pay a premium. To sell the call option, you receive a premium. You might say that the sold call is financing the purchased put option.
Margin is calculated as the risk is unlimited due to the sold call option.u00a0
You can use this strategy with stock options and index options. In either situation, you can combine the strategy with the underlying shares and a u2018normalu2019 stock- and ETF portfolio.