A fully covered short put option by cash is known as a Cash Secured Put. It involves writing an at-the-money or out-of-the-money put option and simultaneously setting aside enough cash to buy the stock. Bullish investors profit if the option expires out-of-the-money or take assignment of the stock at the lower price to fit their overall view and strategy with regards to the underlying security.
A fully covered short put option by cash is known as a Cash Secured Put. It involves writing an at-the-money or out-of-the-money put option and simultaneously setting aside enough cash to buy the stock. Bullish investors profit if the option expires out-of-the-money or take assignment of the stock at the lower price to fit their overall view and strategy with regards to the underlying security.