Put spreads beat covered calls for growth
The guest argued that generating income via covered calls on highly volatile growth stocks is flawed because it caps massive potential upside, whereas selling put credit spreads preserves upside.
The argument
Matt Tuttle explained that for parabolic growth names like Nvidia or Tesla, covered calls sacrifice too much upside, making put credit spreads a superior thematic income-generation tool.
The thesis, stress-tested
✓ What validates it
- ✓Outperformance of put-spread income strategies relative to covered-call strategies during a growth stock rally
▸ Risks discussed
- ▸Sharp, systemic market drawdowns that expose the short puts to significant losses
- ▸High correlation among tech and crypto-related underlyings during market panics
Hear it yourself
"You know, would I still maybe go long queues, short arc? You know, maybe. I haven't even looked at it in that long. I mean, what I do with ARC now is every once in a while when I have time, which I don't all the time, but when I have time and I think the market's overvalued, I'll, you know, either buy puts on ARC or I'll sell a, you know, call credit spread. You know, that that's kinda my preferred hedge because when if the market's gonna come down, ARC's probably gonna come down more. But, you know, I think we're in such a target rich environment too, in kind of the"
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