This might be of some help understanding the instrument.
In general if you sell a call you’re saying you don’t expect the price of the asset to increase (to the strike or above). If you buy a put you are saying you expect the price to go down. Both of these are bets on “short” side in a sense.
The obvious difference is that selling the call costs you nothing up front but could expose you to a larger loss if the prices do spike up. Buying the put costs you the purchase price but after than you will not be exposed to any additional risks.
I think the claim by Zohar, “If you want outsized returns you need to take large risks.” is either wrong or poorly stated. Clearly one can make great returns -- 50%, 100% and more—buying puts and know exactly what you are risking which might be a relatively small monetary amount.
This might be of some help understanding the instrument.
In general if you sell a call you’re saying you don’t expect the price of the asset to increase (to the strike or above). If you buy a put you are saying you expect the price to go down. Both of these are bets on “short” side in a sense.
The obvious difference is that selling the call costs you nothing up front but could expose you to a larger loss if the prices do spike up. Buying the put costs you the purchase price but after than you will not be exposed to any additional risks.
I think the claim by Zohar, “If you want outsized returns you need to take large risks.” is either wrong or poorly stated. Clearly one can make great returns -- 50%, 100% and more—buying puts and know exactly what you are risking which might be a relatively small monetary amount.
And likely ElMonstro does not have the ability to sell naked calls so his only option is to buy puts.