Extending a CoveredCall to a Spread possible?

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earth_imperator

Howdy,
as the subject says: is it possible to extend a CoveredCall (ie. LongStock + ShortCall) to a Spread by using any from this arsenal: LongPut, ShortPut, LongStock? Or via QtyRatio or MoneyRatio or DeltaRatio, ...?
 
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earth_imperator said:
Howdy,
as the subject says: is it possible to extend a CoveredCall (ie. LongStock + ShortCall) to a Spread by using any from this arsenal: LongPut, ShortPut, LongStock? Or via QtyRatio or MoneyRatio or DeltaRatio, ...?
More...
since a covered call is same as short put then you can spread off that short put anyway you want
 
earth_imperator said:
Just found this info:
Bull Call Spread: An Alternative to the Covered Call
It consists of a ShortCall + LongCall.
It's a spread, and according to the text it requires much less capital.
Haven't studied yet, but looks better than CC, IMHO...
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The real question here is, what do you mean by "better"? In other words, what are you trying to accomplish - or, to put it in a different way, what market perspective are you trying to reflect with your trade? A covered call does not reflect the same outlook as a bull call spread (although, as @2rosy mentioned, it's equivalent to a short put. Read up on put/call parity.)

But this can't be traded in a CashAcct... :( Yeah, I need it for CashAcct, not MarginAcct.
Back to the drawing board...
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Depends on the type of cash account and what you're trading. Depending on your broker, you may be able to do spreads in cash-settled indexes such as $SPX.X, $NDX.X and so on in your cash account.
 
earth_imperator said:
Howdy,
as the subject says: is it possible to extend a CoveredCall (ie. LongStock + ShortCall) to a Spread by using any from this arsenal: LongPut, ShortPut, LongStock? Or via QtyRatio or MoneyRatio or DeltaRatio, ...?
More...
Imperator, this is confusing. It would help if you read a couple of basic option books and a many old threads here.

Because you are opening threads and going from sharing tips on shorting puts, asking about weird adjustments... and then stating that you didn't even study basic debit vertical spreads?

I think you should go back to basic. I am not expert although I read a few books and several old threads here, some even too advanced for me.

Otherwise it's like discussing chess opening theories and mating attacks, before knowing how the pieces move.
 
2rosy said:
since a covered call is same as short put then you can spread off that short put anyway you want
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You are of course right, and I too know this relation, ie. LS+SC=SP. and from there on one easily can form a spread using a LongPut etc.
But be seated :), here comes the rationale behind my Q: :)
Your option scanner finds only on the Call side some good trading candidates, but none on the Put side... of the same underlying w/ same ExpDate... Yo see?... :)
 
cesfx said:
Imperator, this is confusing. It would help if you read a couple of basic option books and a many old threads here.

Because you are opening threads and going from sharing tips on shorting puts, asking about weird adjustments... and then stating that you didn't even study basic debit vertical spreads?

I think you should go back to basic. I am not expert although I read a few books and several old threads here, some even too advanced for me.

Otherwise it's like discussing chess opening theories and mating attacks, before knowing how the pieces move.
More...
I hereby am challenging you: just show me/us the answer to this question in the topic.
I bet you don't know either, much like me!... :)
It's a very special case: extending a CoveredCall to a spread.
Do you know the answer to this question? Or can you at least give a link?

And what do you mean by "asking about weird adjustments"? Hae? I don't remember ever have asked such a Q. Just show me.
 
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BlueWaterSailor said:
The real question here is, what do you mean by "better"? In other words, what are you trying to accomplish - or, to put it in a different way, what market perspective are you trying to reflect with your trade? A covered call does not reflect the same outlook as a bull call spread (although, as @2rosy mentioned, it's equivalent to a short put. Read up on put/call parity.)
More...
This is of course subjective or risk-profile-dependent, for me it's "better" b/c it simply is a spread :) Ie. loss side capped.
S.a. my reply to @2rosy.

Depends on the type of cash account and what you're trading. Depending on your broker, you may be able to do spreads in cash-settled indexes such as $SPX.X, $NDX.X and so on in your cash account.
More...
I think my Average Joe retail broker TDA does not do any such non-standard things, and I'm mainly interested in listed equity options, not index options. Thx.
 
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earth_imperator said:
I hereby am challenging you: just show me/us the answer to this question in the topic.
I bet you don't know either, much like me!... :)
It's a very special case: extending a CoveredCall to a spread.
Do you know the answer to this question? Or can you at least give a link?

And what do you mean by "asking about weird adjustments"? Hae? I don't remember ever have asked such a Q. Just show me.
More...
By weird adjustment I meant the "arsenal" you listed for your cc adjustment.

Of course you can turn it into spreads if that's what you want... As 2rosy stated above, you basically have a short put and you can easily spread it.
Just buy an otm put and you have a collar spread, which is like a bull put spread payoff.
As I said, this stuff has been covered plenty here and in books.
 
Just FYI:
I'm bound to the possibilities and limitations of a standard CashAcct with option permission, incl. shorting (as CoveredCall and CashSecuredPut).
CashAcct might look like a little bit limited compared to MarginAcct, but it's my own choice: I just want to do it in a CashAcct, then of course also make only those trades that are possible in a CashAcct. That's OK for me, I'm happy with my CashAcct :D
 
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