Strategy lesson · Basic · bullish
Naked Put Explained
Selling a put without a cash-secured framework still collects premium but retains large downside if the stock gaps lower.
How a Naked Put is built
Sell 1 put (margin may be less than full cash-secured at some brokers).
- Leg 1: sell put · strike template 95 · premium ~2.5 · 1 contract(s)
Risk & reward snapshot
| Market bias | bullish |
|---|---|
| Max profit | Premium received. |
| Max loss | Severe if shares crash (similar economic risk to CSP if assigned). |
| Breakeven | Strike − premium received. |
Figures are conceptual for the classic structure. Your actual premiums, strikes, and fees change the numbers — confirm on the calculator.
When traders use it
- Bullish/neutral income view with capacity to manage or take assignment.
Key risks
- Gap risk through the strike; losses can exceed expected “buffer.”
- Margin can change in stress; brokers may liquidate.
Practical tips
- Cash-secure the put or use a bull put spread for a hard cap on loss.
Practice on the calculator
- Open the Naked Put calculator.
- Load a symbol and option chain; fill realistic mid premiums.
- Review max profit, max loss, breakevens, and the date × price heatmap.
- Change strikes and DTE to see how risk shape shifts.
FAQ
What is a Naked Put?
Selling a put without a cash-secured framework still collects premium but retains large downside if the stock gaps lower.
What is the max loss on a Naked Put?
Severe if shares crash (similar economic risk to CSP if assigned).
When should I use a Naked Put?
Bullish/neutral income view with capacity to manage or take assignment.