Add training workflow, datasets, and runbook
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Cl,opter 19: The Sale of a Put
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TABLE 19-1.
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Results from the sale of an uncovered put.
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XYZ Price at Put Price at
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Expiration Expiration (Parity)
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30 20
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40 10
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46 4
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50 0
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60 0
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70 0
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f IGURE 19-1.
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Uncovered sale of a put.
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$400
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C
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0
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~ ·5.
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X
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w
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'lii
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(/l $0 (/l
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.3 50
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0
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~ a.
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Stock Price at Expiration
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293
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Put Sale
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Profit
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-$1,600
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600
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0
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+ 400
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+ 400
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+ 400
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for a total of $1,400. If the stock were above the striking price, the striking price dif
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forential would be subtracted from the requirement. The minimum requirement is
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I 0% of the put' s striking price, plus the put premium, even if the computation above
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yields a smaller result.
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The uncovered put writing strategy is similar in many ways to the covered call
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writing strategy. Note that the profit graphs have the same shape; this means that the
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two strategies are equivalent. It may be helpful to the reader to describe the aspects
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of naked put writing by comparing them to similar aspects of covered call writing.
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