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Short Naked Put

Analyzing the risk profile of a short naked put

What Happens At Expiration?

If The Put Expires ITM

If the share price is lower than your put strike at expiration, it means your put is
and you will be obligated to buy 100 shares at the strike price. You will get to keep the credit you received for selling the put. Break-even is calculated by subtracting the credit received from the strike. As long as the share price remains above this point, the position will be profitable at expiration.
Figure 5 Figure 6

If The Put Expires OTM

If the put expires OTM, meaning the share price is above the strike, you will get to keep the entire credit received as profit. No shares will be assigned, and the put will disappear from your account by the next trading day.
Figure 7

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