Adam Katz

Protecting Your Portfolio: A Look at Four Safe Haven Investments

Hi Greg,

I thought it was implied but I should have explicitly stated this. These are ways to approach reducing risk in an existing portfolio - the most extreme solution being selling and moving into cash. Buying puts on an existing portfolio reduces risk, and writing a call on an existing portfolio reduces risk as well (like when you delta hedge a portfolio).

Just so readers don't get confused, what Greg is referring to is that setting up a covered call from scratch (buying stock AND writing a call simultaneously) has the same payoffs as selling a put. However, if you already own stock and don't plan to sell, selling a put would be leveraging up (increasing risk), while selling a call is decreasing risk by the value of the premium.