We will go on the screen and the risk analysis to show you the advantages and disadvantages of each option spread. By understanding the risks and defining your risk will determine which option spread you should place.
With selling a PUT you have unlimited risk, but a limited profit potential. When BUYING a CALL you have unlimited profit potential, but unfortunately, the theta or time decay works against you.
If you are new to trading or investing – it is wise to evaluate the profit pictures so that you can see your risk in a visual format.
#sellput #unlimitedrisk #buycall #optiondecay #optionvalue #optiontheta
Posted at: https://tradersfly.com/blog/why-sell-a-put-when-you-could-buy-a-call/
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