An example would be shorting the stock at...11 let's say. Then selling $10 puts for week after week...collecting the premium of 30-70 cents per week. While they do this they have bought APR $20 calls that are 20 cents. There is pain between $11 and $20 if AVXL spikes but then they are fully covered against additional pain by their calls. In a case like this they would probably have assymetric positions where they have more calls than shorts (or staggered options across strikes and time.)