Skip to main content
Learn

Explain the Risk for the Seller of an OTM Put Option

Risk is the underlying price dropping below the strike, leading to a large loss.
Greeks.Live02.11.25

Explain the Risk for the Seller of an OTM Put Option.

The seller (writer) of an OTM Put option is obligated to buy the underlying crypto at the strike price if the buyer chooses to exercise. The risk is that the underlying price drops significantly below the strike price.

The maximum loss is substantial, calculated as the strike price minus the premium received, as the crypto price can fall to zero.

What Does It Mean for an Option to Be “Out-of-the-Money” (OTM)?
What Is ‘Out of the Money’ (OTM)?
What Is the Difference between an In-the-Money and Out-of-the-Money Call Option for a DAO Seller?
Define ‘In-the-Money’ (ITM) for Both Call and Put Cryptocurrency Options

About

Contact

Editorial Policy

Terms of Service

Privacy Policy

Cookie Policy

© 2025 Greeks.Live

All Rights Reserved

Greeks.Live RFQ

Build by Noo on Engine

Source: The content on this website is produced by Greeks.live's proprietary analysis systems, which utilize advanced Large Language Models (LLMs). This information might not be subject to a full human review before publication and may contain errors.
Responsibility: You should not make any financial decisions based solely on the content presented here. We strongly urge you to conduct your own rigorous due diligence and to consult a qualified, independent financial advisor.
Purpose: All information is intended for informational purposes only. It should not be construed as financial, investment, trading, or any other form of professional advice. News and data are not trading signals.
Risk: The cryptocurrency, derivatives, and options markets are highly volatile and carry significant risk. By using this site, you acknowledge these risks and agree that Greeks.live and its affiliates are not responsible for any financial losses you may incur.