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Short put calculator
Bullish naked sale. Collect premium; risk large losses if the stock collapses.
OutlookBullish
Max profitLimited
Max lossNearly unlimited
LevelAdvanced
What is a short put?
A naked short put keeps the credit if the stock stays above A. There is no long put to cap assignment, so loss grows as the stock falls toward zero.
Legs
- Sell a put at strike A
Live example on SPY
Short Put
Net credit$664.00
ROIC0.93%
Max loss$70,435.00
Max profit$664.00
Chance of profitLocked: ProUpgrade
BreakevenAbove $704.36 (−6.8%)At expiration
Est. margin$70,436.00
- 711P−112/18 · $6.64
With SPY at 755.53, on the Dec 18 expiration (49 days out): sell 1 711 put. Net credit $664. Max profit $664; max loss $70,435. Breakeven at expiration: Above $704.36 (−6.8%).
Open this short put in the calculator to move the strikes, change the date and implied volatility, and read profit and loss by price and date.
Questions
- What is a short put?
- A naked short put keeps the credit if the stock stays above A. There is no long put to cap assignment, so loss grows as the stock falls toward zero.
- When does a short put make money?
- Bullish naked sale. Collect premium; risk large losses if the stock collapses.
- What is the max profit of a short put?
- Limited: there is a ceiling on what it can make. The calculator gives the figure for your strikes and expiration.
- What is the max loss of a short put?
- Nearly unlimited: a large move against it can lose many times what it takes in. The calculator gives the figure for your strikes and expiration.
- How do I calculate a short put's profit and loss?
- Open the short put in the strategy calculator. It places the legs on a real expiration, and you can drag the strikes, change the date, and read profit and loss by price and date, with max profit, max loss, and the breakevens.