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Managing a Covered Call

Why I often use covered calls rather than short puts for moderately bullish trades.

Welcome to a new section of Bleeding Edge Macro, called “Anatomy of a Trade”. In this section, we will share tips, tricks and advanced techniques for structuring risk in the market.

In this inaugural post, we look at why covered calls and short puts are not equivalent. Theoretically, the pay off of these trades is equivalent as in each case we assume unl…

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