Difference between Covered Calls and Puts

A covered call means you already hold the shares. A cash-covered (or cash-secured) put means you have the money in your account to buy shares if you're required.

Then, you have uncovered (or naked) calls and puts. Uncovered means you're not holding shares or you don't have the money in your account to buy shares if you're required.

Selling a naked put, a cash-covered put, or a covered call is roughly similar in terms of profit and loss profiles.

A naked call is one of the riskiest strategies because your loss potential is theoretically unlimited since there isn't a limit on high how the stock price can go.

Dan