4 ms·
"Naked selling of put options can be quite dangerous in the event of a steep fall in the price of a stock. The option seller is forced to buy the stock at a cer
by voidmain0001 7y ago
"Naked selling of put options can be quite dangerous in the event of a steep fall in the price of a stock. The option seller is forced to buy the stock at a certain price. However, the lowest the stock can drop to is zero, so there is a floor to the losses."
https://www.investopedia.com/ask/answers/050115/what-types-options-positions-create-unlimited-liability.asp https://www.investopedia.com/ask/answers/050115/what-types-o...
- sirsar 7y agoOP is buying puts, not selling them.
- outworlder 7y ago"naked" "selling" OP is doing neither.
- sdinsn 7y agoHe's buying puts, not selling them. You think market is going down: Buy puts, sell calls You think market is going up: Sell puts, buy calls Maximum loss when buying is only your investment.