42.3 Lessons learnt

  • 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.