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Short Put

Bullish Strategy

Use Zuviz's free options visualizer to build this strategy instantly. Sell a put to collect premium with a bullish/neutral outlook. Also known as a Cash Secured Put when backed by cash to buy shares if assigned.

⚡ Key Takeaways

  • Market Outlook: Neutral to bullish (stock won't drop significantly)
  • Max Profit: Premium received ($3.00 in example = $300/contract)
  • Max Loss: Strike price - premium (can be substantial if stock crashes)
  • Breakeven: Strike - premium (e.g.,

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Market Outlook
Bullish/Neutral
Max Profit
Premium Received
Max Loss
Strike - Premium (if stock goes to $0)
Breakeven
Strike - Premium

📊 Payoff Diagram

Open in Zuviz →

🏗️ Strategy Structure

Leg Action Type Strike Premium
1 Sell Put $95 $2.00

Credit: $2.00/share = $200/contract

🧮 Key Calculations

🎯 When to Use This Strategy

  • Bullish on a stock: Willing to own at lower price
  • Income generation: "Wheel strategy" component
  • High IV environment: More premium to collect
  • Want to buy stock cheaper: Get paid to wait for a dip

📈 Greeks Impact

Theta (Θ)

Positive - You earn money as time passes.

Delta (Δ)

Positive but low - You are slightly bullish.

⚖️ Pros & Cons

Pros

  • Income generation
  • Buy stock at a discount
  • High probability of profit

Cons

  • Substantial downside risk
  • Profit limited to premium
  • Margin required

📝 Real-World Example

Stock: AMD at $100. Trade: Sell $95 Put for $2.00.

Max Profit: $200. Max Loss: $9,300 (if stock goes to 0). Breakeven: $93.

🔗 Related Strategies

💰 Bull Put Spread

Defined risk version with protective long put

📝 Covered Call

Income strategy if you already own the stock

Visualize This Strategy

See the payoff diagram in Zuviz.

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