There's actually quite a few differences between a covered call and a naked put, although, short term none of them are really substantial. Long term the risks can get large.
Let me outline the differences (I'll keep it short, I could probably spend an hour going in depth with details on the differences):
-Rho risk: As interest rates go up, puts are worth less, calls are worth more.
-Ordinary Dividend risk: Any unanticipated dividend increase helps a covered call position. Any decrease or an anticipated increase that doesn't happen hurts the covered call position. The opposite goes for a naked put.
-Special Dividend risk: There may be different tax implications for a covered call vs naked put. Any special dividend has zero effect other than taxes, since contracts get adjusted to compensate for the special dividend.
-Short interest risk: If a stock suddenly becomes hard to borrow due to a large amount of shorting (or whatever other reason), a covered call benefits, and the naked put suffers.
-Margin differences: You will typically be required to put up the 50% margin for the stock you're holding in a covered call. For a naked put, you'll be putting down around 10 - 20% of the strike price for margin.
-Funding: If you're borrowing money from your broker to buy the stock in the covered call, you're probably paying more interest then the amount that's implied by the options.
-Liquidity: It may be more difficult to get out of a covered call then a naked put, since it's 2 legs instead of 1, this may not always be true though.
-Commissions: You will pay more commission to enter/exit a covered call then a naked put
Let me outline the differences (I'll keep it short, I could probably spend an hour going in depth with details on the differences):
-Rho risk: As interest rates go up, puts are worth less, calls are worth more.
-Ordinary Dividend risk: Any unanticipated dividend increase helps a covered call position. Any decrease or an anticipated increase that doesn't happen hurts the covered call position. The opposite goes for a naked put.
-Special Dividend risk: There may be different tax implications for a covered call vs naked put. Any special dividend has zero effect other than taxes, since contracts get adjusted to compensate for the special dividend.
-Short interest risk: If a stock suddenly becomes hard to borrow due to a large amount of shorting (or whatever other reason), a covered call benefits, and the naked put suffers.
-Margin differences: You will typically be required to put up the 50% margin for the stock you're holding in a covered call. For a naked put, you'll be putting down around 10 - 20% of the strike price for margin.
-Funding: If you're borrowing money from your broker to buy the stock in the covered call, you're probably paying more interest then the amount that's implied by the options.
-Liquidity: It may be more difficult to get out of a covered call then a naked put, since it's 2 legs instead of 1, this may not always be true though.
-Commissions: You will pay more commission to enter/exit a covered call then a naked put