Covered Put

Covered Put

Position in a put option where writer of the option also has a short position on the stock. Else the writer may have deposited cash or equivalents matching the option exercise into a cash account. This restricts the risk of the option writer. If option holder exercises his option, the writer is more protected than with a naked put option or uncovered put option.

Related posts:

1. Covered Call
2. Covered or Hedge Option Strategies
3. Uncovered Put
4. Margin Requirement (Options)
5. Being Paid to Receive a Dividend, Covered Call