A covered call strategy can limit the upside potential of the underlying stock position, as the stock would likely be called away in the event of substantial stock price increase. Additionally, any downside protection provided to the related stock position is limited to the premium received. (Short options can be assigned at any time up to expiration regardless of the in-the-money amount.) While this type of trade is often referred to as having unlimited risk, this is not actually the case. The risk in the naked put is slightly different than that of the naked call in that the trader could lose the most if the stock went to zero. That is still a significant risk when compared to the potential reward. And unlike the naked call, if the put is exercised against you, you will receive the stock (as opposed to receiving a short position in the stock, as is the case of the naked call). This would allow you to simply hold the stock as part of your possible exit strategies. "There seems to be a difference of $0.08 to $0.28!", noted the young trading apprentice surprised.