Options Strategies
Short Put
Strategies Short Put
Component Sell put
Potential Profit
  • When the stock price/index level is above the break-even point
  • Limited to the premium received
Maximum Loss Substantial, equals to break-even point minus stock price/index level
Time Value Impact Positive
Break-even Strike price/level minus premium received
  Net Position -1 Feb 200 Put

Component Sell ABC Feb $200 Put
Net Premium Receive $20
Break-even $200-$20=$180
Profit when Stock price is above $180
Potential Profit $20
Potential Loss $180 - stock price
Time Value Impact Positive