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Naked Put Calculator
Selling a naked put is a very risky proposition. Basically, you sell the put option and agree to buy the stock at that price of the put option. Now, if the stock drops to zero, you still pay the price of the put option. Some investors sell a high price put option and then buy a low price put option for protection. This calculator covers the idea of only selling the put option, and does not cover buying the lower price put option for protection.
For this calculator, the only important prices are the strike price of the put option and current market price of the put option. The put option will only be effective if the stock trades below that price. This calculator will calculate the break even and the percent return for a naked put. The percent return assumes buying the stock at the put strike price.
Glossary:
- Percent Return = Option Price / Strike Price
- Break Even = Strike Price - Option Price
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More Reading: http://www.coveredcallstutorial.com/
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Copyright 1997-2006 Joseph K. Sunny, Jr. All rights reserved. For licensing options, please contact me at the e-mail address provided. Webpages on this site are for educational purposes only, please consult a professional in the field of interest, a physician or a stock broker. By using this site, you are agreeing to our Terms and Conditions. Privacy Policy.
About the site and its author: Joseph K. Sunny, Jr., M.D. Most of the pages are created from my reading or clinical experience.
Contact me at joesunny@gmail.com
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