Short Puts

Here is a checklist and guide to help you navigate options expiration week when you have positions that need to be closed, adjusted, or rolled out to the next expiration.

Buying options and selling options have different profit and risk potential based on the rights and obligations of the two parties involved.

A covered put is an options strategy with undefined risk and limited profit potential that combines selling stock with a short put option. Covered puts are used to generate income if an investor is moderately bearish while short a stock.

To create a long synthetic stock position, you simply buy an ATM call option and sell an ATM put option at the same strike price. This creates a bullish position with much less capital than owning stock.

The custom naked put is a bullish options strategy that combines two strategies, which provides some downside protection if the stock moves lower. Think of the strategy as entering an iron condor without the long put.

A short put is a single-leg, bullish options strategy with undefined risk and limited profit potential. A short put is sold when the seller believes the price of the underlying asset will be above the strike price on or before the expiration date.

A short put is a bullish options strategy with undefined risk. Selling a put option is an alternative to buying shares of stock, and the seller receives payment when the option is sold.