Options and Futures

Uncovered put writing

A knowledgeable professor in finance would define a short put option as a position in which the writer does not hold a corresponding short position in the underlying security. This means that the writer has not deposited cash or cash equivalents equal to the exercise value of the put in a cash account. In simpler terms, this strategy is used to generate income from the premiums received without actually owning the underlying security.

Related terms

Cheap

Understand the meaning and definition of Cheap in the context of stock market, trading, and investments.

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Option Premium

Understand the meaning and definition of Option Premium in the context of stock market, trading, and investments.

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Forward (Cash) Contract

Understand the meaning and definition of Forward (Cash) Contract in the context of stock market, trading, and investments.

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Option Seller

Understand the meaning and definition of Option Seller in the context of stock market, trading, and investments.

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