Which option strategy is the most conservative?

Question

Between buying calls, selling covered called, selling naked calls, selling naked puts, buying puts, straddles, spreads, which strategy is the most conservative?

Answer 1

The most conservative of the options you listed would be covered called. To place a covered call, the stock must be owned by the one completing a covered call.

A covered call would be used in a scenario to:

1. Collect income when a stock outlook is neutral to bullish
2. Sell stock above current market price
3. Obtain a small amount of protection if the stock price declines.