Calls against puts, for sellers
Selling a call and selling a put are not opposite trades. On the same chain, at the same distance in probability terms, the put pays more, ties up cash instead of stock, and leaves you long the company if it goes wrong. The call leaves you flat. That difference decides more than most people realize.
The textbook version says a short call is bearish and a short put is bullish and stops there. Both are wrong in the way that matters: a premium seller is not making a directional bet, and treating these as a direction picker leads to selling calls on things you hate, which is how accounts get run over.
Two trades on one chain
DKNG at $38.40, September 19, 45 days. Take the two contracts a seller would actually look at, matched roughly on delta so the comparison is fair.
| Sell the $43 call | Sell the $34 put | |
|---|---|---|
| Delta | 0.205 | 0.184 |
| Implied volatility | 34.8% | 44.0% |
| Bid | $0.49 | $0.64 |
| Credit | $49 | $64 |
| Odds it finishes in the money | 17.2% | 22.8% |
| What it ties up | 100 shares, $3,840 | $3,400 in cash |
| Return on that, 45 days | 1.28% | 1.88% |
| Annualized | 10.4% | 15.3% |
| If it goes wrong | shares sold at $43 | shares bought at $34 |
Lower delta. More money. That is not a mistake in the table.
Why the put pays more
Look at the implied volatility column. The $34 put is priced off 44.0 percent and the $43 call off 34.8 percent, on the same stock, in the same expiry, at the same moment. Nine points of difference, for strikes that are almost equidistant in probability.
That is skew, and it is not a pricing error somebody left lying around. Downside strikes cost more because crashes are faster than rallies, because people buy puts as insurance and somebody has to sell it to them, and because a stock that falls 30 percent gets more volatile on the way down while one that rises 30 percent usually gets calmer. The put skew page takes the shape apart and the smile page covers why the whole curve bends.
For a seller the practical version is short: at any given delta the put side pays better, and it pays better because the risk you are underwriting is worse. You are not finding free money in the put column. You are being paid correctly for a nastier tail.
What each one leaves you holding
This is the part that decides it, and it is not about return.
The call goes wrong and you are flat. DKNG runs to $49, your 100 shares go at $43, you collected $49 of premium and $460 of appreciation, and the position is closed. You feel bad about the $600 you left on the table. Your account is up.
The put goes wrong and you own the company. DKNG drops to $29, you buy 100 shares at $34, and you are down $500 on day one with $3,400 of capital now committed to a stock in a downtrend. The premium covered $64 of that. What happens next is a page of its own and it is the least comfortable page in this series.
So the two sides fail in completely different currencies. One costs you upside you never had. The other costs you cash and hands you an inventory problem.
The choice is usually made for you
In practice you do not sit down and pick a side from a blank slate.
You already own the shares. Then it is a covered call, because you can sell one today without adding a dollar of capital or a share of new exposure. This is why covered calls are most people's first option trade and it is a decent reason.
You have cash and want the stock cheaper. Then it is a cash-secured put, and the test is the one the CSP page keeps repeating: would you buy 100 shares at that strike, today, happily. If the honest answer is no, the extra 15 cents of skew premium is not a reason.
You have cash and no view. Then the put still wins on the arithmetic above, and running the wheel is what happens when you keep doing it.
What almost never makes sense is selling a naked call because you dislike the stock. The payoff table on the contract page shows why: the loss has no floor, and a short squeeze on a hated name is the exact scenario that produces one.
The thing both sides share
You are short an option either way, which means every Greek flips sign: positive theta, negative gamma, negative vega. Time pays you and movement hurts you, regardless of which column you sold from. The direction argument is mostly noise on top of that.
And the capital story is the one people underestimate. The covered call needs $3,840 of stock you have to buy and keep owning. The put needs $3,400 of cash that sits still for 45 days. Neither is free, and measuring the return against the capital rather than the premium is what turns a 15 percent number into an honest one.
OptionsKing scores every candidate strike on a deterministic 0 to 100 scale, blends that score with the return on the capital the trade ties up, and shows you the highest-ranked handful. There is no minimum score. How it works covers what the ranking does and does not tell you.
Questions people actually ask
Is it better to sell calls or puts?
On the same chain the put usually pays more for the same delta, because of skew. On this one the $34 put is 0.184 delta and pays $64 while the $43 call is 0.205 delta and pays $49. What decides it is what you already hold: shares point to covered calls, cash points to cash-secured puts.
Why do puts have higher implied volatility than calls?
Crashes are faster than rallies, hedgers buy downside protection and somebody has to sell it, and volatility rises as a stock falls. On the worked chain the $34 put carries 44.0 percent and the $43 call 34.8 percent, nine points apart at almost the same probability.
Is selling a put bullish?
Mildly, but that framing misses the trade. A short put profits when the stock is anywhere above the strike at expiry, including flat and slightly down, and the seller is being paid for time and volatility rather than direction. The real requirement is being willing to own the shares.
Should I sell a call on a stock I think will fall?
Not a naked one. The loss on an uncovered short call has no upper bound and a takeover or a squeeze on a hated name is exactly the event that produces it. If you own the shares a covered call is a different trade entirely.
Sources
Rules and thresholds above were checked against these documents on August 4, 2026. Exchange and broker rules change. Confirm anything you are about to act on with your own broker.
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Do the math on your own trade
Every price in this article is an illustrative worked example, not a quote. Read Options basics for the rest of the series, and the disclaimer before you act on any of it. Selling options carries real risk of loss, and the loss can be far larger than the premium you collected.