Short Put
omponents
A short put is simply the sale of a put option.
Risk / Reward
Maximum Loss: Unlimited in a falling market.
Maximum Gain: Limited to the premium received for selling the put option.
Characteristics
When to use: When you are bullish on market direction and bearish on market volatility.
Like the Short Call Option, selling naked puts can be a very risky strategy as your losses are unlimited in a falling market.
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