Strategies · bullish · undefined risk
Naked Put Calculator
Sell a put without the cash set aside. Keeps the premium if the stock stays above the strike.
A naked put is a short put sold on margin rather than against cash set aside for assignment. The payoff is the same as the Cash-Secured Put: the premium is the maximum gain, and the loss grows one for one below the breakeven. The difference is capital. Margin lets the trader hold the position for a fraction of the strike, which raises the return on capital and the damage a large drop can do.
When it is used
Traders sell naked puts to collect premium on stocks they expect to hold steady or rise, and sometimes as a way to be paid for a limit order below the market. It is used on indexes, where the risk of a single-name collapse is absent, and on stocks after a fall has lifted implied volatility.
How it makes and loses money
Profit comes from time passing and volatility falling. Loss comes from the stock falling, and it comes fast when the fall is sharp, because implied volatility rises at the same time and the put gains value on both counts. The position is short volatility and long the stock at once.
What to check in the grid
The rows below the strike are where the position looks like owning shares. Compare the columns: early in the trade a drop to the strike is already a meaningful loss, while at expiry the same price is still a full profit. That gap is why short puts are often closed early at a portion of the credit.
The calculator below opens with placeholder legs for this strategy. Set the strikes, expiries and the prices from your broker; every number updates as you type.
Underlying
Interest rate, dividend yield and settlement are under .
Net credit 185 · to open, before commissions
Muted numbers are solved by the model. Keys: n add leg, Delete remove, [ ] strike, { } expiry, + − side, t strategies. How the numbers are made.
Estimated returns
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Grid: hover for the trades behind a cell; click or press Enter to pin it; arrow keys move, Esc clears. Keys: g grid, c chart, b both, m next value mode.