How Can a Put Option Seller Mitigate Their Potential Loss? ⎊ Path

How Can a Put Option Seller Mitigate Their Potential Loss?

A seller of a crypto put option can mitigate their potentially large loss by employing several strategies. One common method is to sell a "cash-secured put," where the seller holds enough cash or stablecoins to buy the underlying crypto at the strike price if exercised.

Another method is to use a "put spread," where the seller simultaneously buys a lower-strike put option, which limits the maximum loss to the difference in strike prices minus the net premium received.

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