THE OPTIONS COURSE- SHORT PUT
THE OPTIONS COURSE SHORT PUT A short put strategy offers limited profit potential and limited, yet high risk. It is best placed in a bullish market when you anticipate a rise in the price of the underlying market beyond the breakeven. By selling a put option, you will receive the option’s premium in the form of a credit into your trading account. The premium received is the maximum re ward for a short put position. In most cases, you are anticipating that the short put will expire worthless. A short put strategy creates a risk profile that slants downward from right to left from the limited profit. Notice that as the price of the asset falls, the loss on the short put position increases (until the price of the underlying stock hits zero). Additionally, the profit is lim ited to the initial credit received for selling the put. When the underlying instrument’s price rises, you make money; when it falls, you lose money. This strategy provides limited profit p