Covered call vs cash-secured put

At the same strike and expiry the two have almost the same payoff: limited upside, nearly full downside, premium up front. So the choice is about what you already hold.

Rule of thumb

Already own the shares? Sell the call. Want to own them at a lower price? Sell the put. Choose by what you hold, not by which premium looks bigger.

Option A

Covered call

Own 100 shares · sell 1 out-of-the-money call · weekly to monthly

Profit Loss Stock now

Best for

Shares you already hold and would be happy to sell a little higher.

What you get

Premium on top of dividends; the upside is capped at the strike, the downside is the stock's, less the premium.

Build a covered call

Option B

Cash-secured put

Hold cash = strike × 100 · sell 1 out-of-the-money put · weekly to monthly

Profit Loss Stock now

Best for

A stock you want to own, at a price below today's.

What you get

Premium plus interest on the cash; if assigned, you buy at the strike less the premium.

Build a cash-secured put

Side by side

	Covered call	Cash-secured put
You start with	100 shares	Cash: strike × 100
Payoff	Capped above the strike, full downside less the premium	The same shape, one strike lower
Dividends	Yes, you hold the shares	No
Interest	No (the money is in the shares)	Yes, on the cash set aside
If assigned	The shares are called away at the strike	You buy the shares at the strike
Next step	Sell a put to get back in	Sell a call on the new shares: the wheel
Prefers	Higher IV: the call pays more	Higher IV: the put pays more, and put skew adds a little

Why they are nearly the same

Put-call parity: owning the shares and selling a call has the same payoff at expiry as selling a put at the same strike and holding the cash.
The small differences are carry: dividends on the shares against interest on the cash, and the put skew in the premium.

What actually differs

Starting point: you either hold the shares or you don't. Turning one into the other costs commissions and maybe taxes.
Early assignment: deep in-the-money calls get assigned before an ex-dividend date; deep in-the-money puts when the time value is gone.

Payoff sketches are at expiry on a $100 stock, for shape only. Education, not advice: disclaimer.