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The total risk is 2k. So, the puts could end up worthless at the expiry date.


"Naked selling of put options can be quite dangerous in the event of a steep fall in the price of a stock. The option seller is forced to buy the stock at a certain price. However, the lowest the stock can drop to is zero, so there is a floor to the losses." https://www.investopedia.com/ask/answers/050115/what-types-o...


He's buying puts, not selling them.

You think market is going down: Buy puts, sell calls

You think market is going up: Sell puts, buy calls

Maximum loss when buying is only your investment.


OP is buying puts, not selling them.


"naked" "selling"

OP is doing neither.


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