|
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 |
Example
| 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 |
Back
|
|
|