Short Put – When You’re Bullish but Prefer Getting Paid to Wait

Short Put – Income Strategy with Defined Downside Risk (Illustrative Example:

| May 2023 | Historical Price Reference) Market View Bullish to Neutral. This strategy is used when the stock is expected to stay above a chosen support level or rise moderately. In this illustrative case, DIVISLAB was trading around ₹3250 in May 2023, and the expectation was that the price would hold above nearby support. The Trade (Illustrative | Hypothetical Premium) • Sell DIVISLAB 3200 Put @ ₹70 (Strike and premium are illustrative and used only to explain the concept.) Breakeven • Strike Price − Premium Received • 3200 − 70 = ₹3130 Max Profit • Limited to premium received (₹70) • Achieved if DIVISLAB expires above 3200 Max Loss • Substantial but defined • Occurs if DIVISLAB falls sharply below breakeven Premium & Margin • Premium: Receive upfront • Margin: Required Effect of Time & Volatility • Time decay works in your favour if price stays above 3200 • Falling implied volatility benefits the position Quick Logic Check (Important) • Profit comes from price stability, not a big rally • Best used near strong support zones • Risk exists if support breaks decisively 📌 Disclaimer: This content is for information only and not investment advice. Investments in securities market are subject to market risks. Read all the related documents carefully before investing. AI may have been used for grammatical and sentence-structure refinement. Please consult a SEBI-registered advisor before making any investment decisions.