Covered Call	Covered Put
Buy the stock	Short the stock
Collect premium on write of call	Collect premium on write of put
Risk is if stock goes down	Risk is if stock goes up (because of short)
If called deliver stock owned	If assigned deliver stock to pay short

The covered put strategy is a neutral to bearish strategy because the investor is expecting the stock to go down or stay neutral. When the stock drops, the investor will have the stock put to them at the short put strike price. This covers the obligation of the shares of stock that were shorted. The investor keeps the initial premium received from selling the put. If the stock rises the investor keeps the premium, but they are still holding the short stock obligation and could sustain a loss to close the short. If the short put does expire worthless without assignment, the investor could look to sell another put at a different strike for the next expiration month.

Example: Short Stock XYZ @ $24.67
Write (Sell) the OCT 25 (ATM) Put at $1.90
Break Even =	Short Stock Price + Option Bid = $26.57
Maximum Profit =	[(Short Stock Price - Strike Price) + Option Bid = $1.57
% Downside Protection =	Option Bid ÷ Short Stock Price = 7.7%
% if Assigned =	Max Profit ÷ (Short Stock Price - Net Credit) = 6.9% (If stock below $25 at exp.)

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Cautions with this strategy:
	The Maximum Risk is infinite, as the stock can rise infinitely.
	Most conservative investors shy away from shorting stock.
	If good news comes out, the stock could rise suddenly, faster than the investor can roll the put.
	Most investors looking to collect premium trading puts will simply sell a Naked Put or trade a Bull Put Credit Spread.

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Selling Covered Puts - Covered Put Strategy - Covered Put Tips