The combination of a position in a covered call and a position in a protective put on a stock index (where the options have the same strike and maturity)is similar to:

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The combination of a covered call (which involves owning the stock and selling a call option) and a protective put (buying a put option on the same stock) creates a position that is similar to owning a risk-free asset. This is because the call option caps the upside potential while the put option protects against downside risk, effectively locking in a certain return similar to that of a risk-free asset. This combination is akin to a long position in a balanced index fund, where the fund holds both the stock and an investment at the risk-free rate, balancing the risk and return.

The Combination of a Position in a Covered Call and a Position