304 Part Ill: Put Option Strategies 
TABLE 20-1. 
Results at expiration of covered straddle write. 
Stock (A) 100-Shore (8) Put 
Price Covered Write Write 
35 
40 
46 
50 
60 
FIGURE 20-1. 
-$1, 100 
600 
0 
+ 400 
+ 400 
Covered straddle write. 
+$800 
§ +$400 
e ·5. 
~ 
al 
en $0 en 0 ...J 
c5 
e a. ~, 
,,' ,, ,, 
,, ,, 
,, ,, 
,, 
-$1, 100 
600 
0 
+ 400 
+ 400 
100-Share Covered 
Call Write 
~-----------------► 
, 46 50 
Stock Price at Expiration 
Covered Straddle 
Write (A+ 8) 
-$2,200 
- 1,200 
0 
+ 800 
+ 800 
is below 46 at expiration. The covered straddle writer loses money twice as fast on 
the downside, since his position is similar to a 200-share covered write. Because the 
commissions are smaller for the naked put write than for the covered call write, the 
covered call writer who adds a naked put to his position will generally increase his 
return somewhat. 
Follow-up action can be implemented in much the same way it would be for a 
covered call write. Whenever one would normally roll his call in a covered situation,