Series 65: Short Put

Short Put

On the other side of the long Salmonella put is a short put. If an investor shorts the same put on Salmonella Seafoods, she will receive the $1.50 premium that you, the buyer, will have paid. If at expiration the stock price has risen above the strike price of $20, the option will expire worthless, and the option writer will pocket her premium of $150 ($1.50 x 1 put x 100 shares). If the price of the underlying stock drops b