Learn Option Basics Part 5

Option Basics Part 5

What you will learn

Put option – seller perspective

Option chain – seller perspective

Live trading example

Salling put option on qqq


What Is a Short Put?

A short put refers to when a trader opens an options trade by selling or writing a put option. The trader who buys the put option is long that option, and the trader who wrote that option is short.

The writer (short) of the put option receives the premium (option cost), and the profit on the trade is limited to that premium.


  • A short put is when a trader sells or writes a put option on security.
  • The idea behind the short put is to profit from an increase in the stock’s price by collecting the premium associated with a sale in a shot put.
  • Consequently, a decline in price will incur losses for the option writer.

Basics of the Shot Put

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A short put is also known as an uncovered put or a naked put. If an investor writes a put option, that investor is obligated to purchase shares of the underlying stock if the put option buyer exercises the option.

The short put holder could also face a substantial loss prior to the buyer exercising, or the option expiring if the price of the underlying falls below the strike price of the short put option.



Put Option Seller perspective
Put option – seller perspective
What we will learn in this section
Option Premium
Put Option Definition – Seller perspective
Put Option real world – Seller perspective
Option chain – seller perspective
What we will learn in this section
At the money Option and Risk Graphs
In The Money Option and Risk Graphs
Out Of The Money Option and Risk Graphs
Expiration Date
Conclusions Option Chain – Seller perspective
The four strategies BOX – Call and Put Options
Live trading example
What we will learn in this section
Sell put option on ES Future contract
Break-even point
Case Profit
Case 1500
Case 600
9 days for the expiration of the option
Close position
Salling put option on qqq
Selling Put on QQQ open position
Close Position Selling Put on QQQ
Continue to the next section put option
Using Put Options to limit risk
Selling PUT and buying CALL to create a synthetic contract
Introduction to Time Decay

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