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If an investor wants to generate income, is buying or selling a call/put better?

User Awy
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1 Answer

4 votes

Final answer:

Selling a call is a better option for an investor to generate income.

Step-by-step explanation:

When an investor wants to generate income, selling a call is a better option. Selling a call involves giving someone else the right to buy a stock at a certain price (called the strike price) within a certain time period. The investor receives a premium for selling the call, which is income. If the stock price remains below the strike price, the call will expire and the investor keeps the premium. If the stock price rises above the strike price, the call may be exercised and the investor may have to sell the stock at the strike price, but they still get to keep the premium.

User Douglas M
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