A naked put option calculator allows an option trader to key in the following data points:
- Stock Price.
- Put option strike price.
- Naked put option premium credit received.
- Days until expiration.
- Margin interest rate when needed.
An option trader must consider whether the put option is a cash-secured put in a cash settled account or a naked but written in a margin account.
Here is the data that the put calculator will show:
- Capital required to initiate the put option sell. Cash-secured or margin.
- The break even price level for the short put.
- The maximum potential gain of credit received.
- The potential return on capital at risk from the short put option.
- Annualized return on capital.
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