Differences Between Call and Put Premiums

10/19/2015 8:00 am EST

Focus: OPTIONS

Alan Ellman

President, The Blue Collar Investor Corp.

In this video, Alan Ellman, of TheBlueCollarInvestor.com, shares a question-and-answer between him and a subscriber about the differences between call and put premiums. Alan evaluates some of the factors that go into premium pricing and then breaks it down to make some sense of it. 

I heard you speak twice in Plainview, NY and have been following your covered call method for about two years with great success. Thanks. Now I am interested in cash-secured puts and have stumbled across a question. Depending on the stock, the ratio of call-ask premiums to put-ask premiums is lopsided…sometimes greater than 2-to-1. Why is that and is there any inference I can draw from that about the stock?

By Alan Ellman of TheBlueCollarInvestor.com

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