Naked Put
Sell Put without cash reserve
Positions in Chart: Sell 1 lot of 25400 PE (uncovered). Spot price: 25800
Setup
Sell OTM Put without cash
When to Use
- High conviction bullish outlook
Market Outlook
Volatility Expectation↘Expected to Fall Sharply
Price Direction↗→Expected to Rise or Stay Flat
Risk & Reward
Breakeven PointStrike Price - Premium Received
Max Contract LossStrike Price - Premium Received
Max Position LossSame as Max Contract Loss
Strategy Details
Complexity LevelHigh Risk
DirectionSteady Bullish
VolatilityFall
Number of Legs1 Leg
Strategy TypeCredit
Hedging CapabilityNo Hedging or Naked
Description
A naked put involves selling a put option without holding cash to buy the stock
Example
If NIFTY is at ₹25,800, you sell a ₹25,400 Put for ₹35, receiving premium but risking having to buy stock at ₹25,400 if it falls.
This information is for educational purposes only and should not be considered as financial advice. Always consult with a qualified financial advisor before making investment decisions. Data is constructed and is not actual. Calculations may have errors.
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