A buy-and-write strategy is equivalent to a short put on the asset.

Question

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A buy-and-write strategy involves purchasing an asset and simultaneously writing call options on that same asset. This is similar to a short put position, as the seller of a put option has the obligation to purchase the underlying asset at the strike price if the buyer decides to exercise their option. Therefore, a buy-and-write strategy can be seen as a short put position in terms of the overall risk and reward.

A Buy-And-Write Strategy Is Equivalent to a Short Put on the Asset