The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “Why sell a put instead of buy a call?” And I think the answer to this question is actually relatively straightforward, though I’m going to be making a lot of generalities in this podcast. There’s a lot of differences and nuances in different option expiration timelines and strike prices that you would use for the selling of a put or the buying of a call, so again, I’m just talking in generalities here, but the reason that you would sell a put option instead of a call option, number one, is that the put option as an option selling position has an implied volatility premium edge already baked into the contract. It’s this idea that we continue to talk about here at Option Alpha which is that implied volatility at the time that you enter a contract is typically overstated long-term. And so, when you’re selling options, you immediately have a pricing advantage compared to an optio