naked put

The potential loss on a naked put can be substantial.

This book goes further and helps the reader understand how to manage a naked put position no matter what direction the stock might turn.

The naked put generally requires less in brokerage fees and commissions than the covered call.

"I knew nothing of these naked calls and naked puts," he added, referring to high-risk options.

The naked put is a neutral-to-bullish strategy and consists of selling a put option against a stock.

A textbook may state that writing a covered call is synthetically the same as writing a naked put, but in practice there are subtle differences.

An A-Z guide to naked puts, an income-generating stock options investment strategy.

Naked put return

The naked put profit/loss profile is similar to the covered call (see above) profit/loss profile.

Option writing strategies include covered calls, Naked calls naked puts, bear call spreads and bull put spreads.

Naked Puts - Power Strategies for Consistent Profit

The bottom fell out in October, however, when lengthy trading delays and wildly fluctuating prices crushed many investors, especially those who had sold so-called naked put options.

A naked put, also called an uncovered put, is a put option whose writer (the seller) does not have a position in the underlying stock or other instrument.

They say that on their broker's recommendation, they sold - or "wrote" - naked puts on the S.&P. 100-stock index the week of Oct. 12.

Naked Put Potential Return = (put option price) / (stock strike price - put option price)

John Brasher, "Writing Naked Puts I." "Money Newsletter" (December 15, 2005).

I felt a little too naked putting it that way, and Lester didn't say anything back, just put his cruiser into gear and pulled out of the truck lot heading west.

For example, for a put option sold for $2 with a strike price of $50 against stock LMN the potential return for the naked put would be:

It is one of the riskiest options strategies because it carries unlimited risk as opposed to a naked put where the maximum loss occurs if the stock falls to zero.

The changes are likely to include raising the amount of money that customers must keep in their accounts to trade, which could limit the use of a risky trading strategy known as "naked puts."

Zerenner, Ernie and Michael Chupka, Naked Puts - Power Strategies for Consistent Profits, 1st edition, Power Financial Group, 2008, p. 202.

Selling naked puts is a conservative income-generating strategy that allows investors to earn premium on bullish and neutral stocks and is the best strategy to acquire stock at a discount.

Since in equilibrium the payoffs on the covered call position is the same as a short put position, the price (or premium) should be the same as the premium of the short put or naked put.