While it may not seem possible, both strategies are identical. It's probably easier to show two investors who are identical but use different strategies. Assume you have Investors A and B with $5,000 cash each.

 

Investor A buys shares for $50 and sells a $50 call for $3. He spends his $5,000 on the stock and receives $300 cash which earns interest.

 

Investor B sells a naked put, which we'll assume for the moment is for $3 too. He now has $5,300 cash and the potential obligation to buy shares for $50.

 

Now outline various stock prices and see what happens:

 

Stock price is same: If the stock price is $50 at expiration, both options expire worthless and both investors make $300.

 

Stock price rises: Assume price rises to $60. Investor A gets assigned and is required to sell his shares for $50, which is exactly what he paid. His profit will be the $300 received from the call. Investor Bs put expires worthless and he keeps $300 from the put.

 

Stock price falls: Now assume the stock price falls to $40 at expiration. Investor A loses $10 on his stock, which is offset by the $300 call premium for a total $7 loss. Investor B will get assigned on his short put and be required to buy 100 shares for $50 -- even though they are trading for $40. He immediately has a $10 loss, which is also offset by the $3 put premium for a total loss of $7.

 

Now, the one thing you might think is still not accounted for is the interest factor. Investor A spends cash today and does not earn interest. Investor B keeps his cash and earns interest. However, that is accounted for too. Investor B will not receive $3 for the put. The price of the put will be $3 less the cost-of-carry on the exercise price! In other words, the at-the-money call's price always exceeds the put's price by the amount of interest that will be lost by purchasing the stock.

 

The two positions -- covered call and naked put -- are absolutely identical. Of course, in the real world of trading, you'll pay two commissions for the covered call and only one for the naked put. However, you'll also post a margin requirement for the naked put (roughly 25% of the underlying stock's value).  Those, however, are man-made restrictions. The two strategies by themselves -- covered call and naked put -- are identical.