We often buy stock or an ETF for two reasons: the position is part of our core bias OR we are buying while the market is at a recent price extreme. No matter the reason behind getting long a given market, we must put our plan into action and that usually utilizes options for capital efficiency.
Today’s debate centers around the comparison between buying calls and selling puts in the aim of generating long deltas.
Both have their pros and cons:
- Long calls have infinite profit potential
- Long Calls require less buying power versus selling puts
- Short Puts have the ability to profit from no movement in the underlying market.
Tom and Tony review all of these attributes while adding some historical context as well in today’s edition of Options Jive. Watch the above video for a more detailed comparison of long calls and short puts.