A naked put, also known as an uncovered put, is an options trading strategy in which an investor sells put options on an asset without actually owning the underlying asset. This strategy is considered "naked" because the investor is taking on the obligation to buy the underlying asset at the agreed-upon strike price if the put option is exercised, without actually having the asset in their possession. Overall, naked put strategies can be a risky but potentially profitable way for investors to take advantage of their bullish views on a stock. Because this strategy involves taking on the obligation to buy the underlying asset, it is important for investors to carefully assess the potential risks and rewards before entering into a naked put trade.
Max Profit: Maximum profit is limited to the premium received.
Max Loss: Maximum loss is the difference between the price at entry and current price less the premium received.