Selling or “Going Short” on a Put is a strategy that must be devised when the investor is Bullish on the market direction and expects the stock price to rise or stay sideways at the minimum
When investor sells a Put, he/she earns a Premium (from the buyer of the Put) .If the underlying price increases beyond the Strike price, the short Put position will make a profit for the seller by the amount of the premium. But, if the price decreases below the Strike price, by more than the amount of the premium, the Put seller will lose money.
Investor View: Very Bullish on the Stock / Index.
Reward: Limited to the premium received.
Breakeven: Strike Price – premium received.