Single options
Neutral to bullish
Credit
Risk: Undefined: large below the breakeven
Short put (naked)
Also called: Sell put, PE sell, Put writing
Sell a put and collect its premium: keep it if the underlying stays above the strike; lose heavily in a sharp fall.
Payoff sketch (per unit, index points)
At expiry
Today (7 days left)
Net premium
Credit 87 pts
Max profit
+87 pts (₹5,623 per lot)
Max loss
Large as the price falls
Breakeven
24,713
How it works
The seller receives the premium and owes the put's value at expiry. Above the strike the put expires worthless and the premium is kept; below it, every point of fall is a point of loss beyond the premium.
At expiry a short put has the same payoff shape as a covered call (long underlying plus short call at the same strike, by put-call parity): a capped gain and the downside of owning the underlying.
When traders use it
- A view that the price will hold above the strike before expiry.
- Collecting the put skew: index puts usually carry a higher implied volatility than calls.
Greeks
| Delta | Positive: the position gains as the price rises and loses as it falls. |
| Gamma | Negative: losses accelerate as the price falls toward and through the strike. |
| Theta | Positive: time decay works for the seller. |
| Vega | Negative: falls in the market usually come with rising implied volatility, which hurts twice. |
Profit, loss and margin
| Max profit | The premium received, less charges, if the put expires out of the money. |
| Max loss | (Strike − premium) × quantity if the underlying went to zero; in practice the size of the fall below the breakeven. |
| Breakeven | Strike − premium received. |
| Margin | SPAN plus exposure margin, comparable to futures for a put near the money. |
In India
- Short options are margined like futures: NSE Clearing's SPAN risk margin plus an exposure margin (2% of notional for index contracts, 3.5% for stocks in Arthfy's model). An at-the-money short option on NIFTY typically blocks well over a lakh of rupees per lot.
- STT is charged on the premium when an option is sold (0.15% of premium from 1 April 2026 in Arthfy's cost model). A short option left to expire, in or out of the money, is not charged STT again at settlement.
- Since 20 November 2024 an extra 2% extreme-loss margin applies to short index options on their expiry day, so a position carried into expiry morning can need more margin than it did the day before.
- Stock options and stock futures are physically settled: an in-the-money stock option held through expiry becomes a delivery of shares (taxed and margined like a delivery trade, on the full value), so brokers often square such positions off in expiry week or raise margins. Index options are cash-settled.
Market-wide falls are when implied volatility jumps, margins rise and liquidity thins, all at once.
Arthfy numbers
Arthfy numbers
Short put: what it did since 2016
0-2 d
3-7 d
8-15 d
16-30 d
31-45 d
Try it in the F&O hub
Opens the tool with this structure on today's NIFTY chain. Reading is free with an Arthfy account; some runs use free attempts.Open in the builderPayoff, Greeks, scenario grid and charges on today's NIFTY chain
Backtest since 2016Daily data, every NIFTY expiry
Replay on expiry daysMinute data since October 2024
Open the option chainLive premiums, IV and Greeks
Related
For education: how the structure works and what it did historically, not a recommendation to trade it.
