# How Does a Naked Put Option Expose a Trader to Risk? ⎊ Path

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

---

## How Does a Naked Put Option Expose a Trader to Risk?

Selling a naked put obligates the seller to buy the underlying asset at the strike price if the option is exercised. The risk is that the underlying asset's price could fall dramatically, potentially to zero.

The maximum loss is the strike price multiplied by the contract size, minus the premium received. This is a substantial risk, as it requires significant capital commitment.

- [Why Is the Maximum Loss for an OTM Option Seller Theoretically Unlimited?](https://learn.greeks.live/path/why-is-the-maximum-loss-for-an-otm-option-seller-theoretically-unlimited/)

- [What Is Margin Requirement in the Context of Writing Naked Options?](https://learn.greeks.live/path/what-is-margin-requirement-in-the-context-of-writing-naked-options/)

- [How Is a “Cash-Secured Put” Different from a Naked Put?](https://learn.greeks.live/path/how-is-a-cash-secured-put-different-from-a-naked-put/)

- [What Is the Maximum Profit for a Seller of a Naked Put?](https://learn.greeks.live/path/what-is-the-maximum-profit-for-a-seller-of-a-naked-put/)

- [What Is the Maximum Loss for the Seller (Writer) of a Crypto Put Option?](https://learn.greeks.live/path/what-is-the-maximum-loss-for-the-seller-writer-of-a-crypto-put-option/)

- [What Is the Primary Risk of Selling a ‘Naked Call’ Option?](https://learn.greeks.live/path/what-is-the-primary-risk-of-selling-a-naked-call-option/)

- [Why Is the Loss on a Naked Put Not Considered ‘Unlimited’?](https://learn.greeks.live/path/why-is-the-loss-on-a-naked-put-not-considered-unlimited/)

- [What Is the Primary Risk for a Short Seller of a Naked Call Option?](https://learn.greeks.live/path/what-is-the-primary-risk-for-a-short-seller-of-a-naked-call-option/)

## Glossar

### [Naked Put](https://learn.greeks.live/area/naked-put/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Strategy ⎊ A Naked Put is an options trading strategy where the investor sells a put option without holding a corresponding short position or the underlying asset, obligating the seller to purchase the asset at the strike price if the option is exercised.

### [Naked Put Option](https://learn.greeks.live/area/naked-put-option/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Position ⎊ A naked put option position involves selling a put option without holding a corresponding short position in the underlying asset.

### [Strike Price](https://learn.greeks.live/area/strike-price/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Reference ⎊ The Strike Price is the predetermined reference level set at the contract's inception against which the underlying crypto asset's spot price is compared at expiration or exercise.

## Discover More

### [What Is a "Naked Option" and How Is It Analogous to an Unhedged ASIC Investment?](https://learn.greeks.live/path/what-is-a-naked-option-and-how-is-it-analogous-to-an-unhedged-asic-investment/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a "Naked Option" and How Is It Analogous to an Unhedged ASIC Investment?](https://learn.greeks.live/wp-content/uploads/2025/10/Macro-View-of-Scanner-Lamp-Assembly-Reflecting-on-Glass-Platen-for-Volatility-Surface-Mapping.webp)

Both carry theoretically unlimited risk; the naked option has unlimited loss potential, like an unhedged ASIC investment.

### [What Is the Risk of Liquidation in a Highly Leveraged Naked Call Position?](https://learn.greeks.live/path/what-is-the-risk-of-liquidation-in-a-highly-leveraged-naked-call-position/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Risk of Liquidation in a Highly Leveraged Naked Call Position?](https://learn.greeks.live/wp-content/uploads/2025/10/Reflective-Substrate-Interaction-with-Magnetic-Coil-Assembly-Simulating-Decentralized-Exchange-Liquidity-Pools.webp)

Forced closing of the position by the exchange when equity falls below maintenance margin, leading to permanent loss.

### [How Does a "Naked" Option Position Expose a Trader to Unlimited Intrinsic Value Risk?](https://learn.greeks.live/path/how-does-a-naked-option-position-expose-a-trader-to-unlimited-intrinsic-value-risk/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a "Naked" Option Position Expose a Trader to Unlimited Intrinsic Value Risk?](https://learn.greeks.live/wp-content/uploads/2025/10/Decoupling-of-Digital-Asset-Derivatives-Structure-Revealing-Internal-Layered-Tokenization-Matrices.webp)

A naked short call exposes a trader to unlimited intrinsic value loss as the underlying price can rise indefinitely.

### [What Is the Difference between a Covered and a Naked Option Writer?](https://learn.greeks.live/path/what-is-the-difference-between-a-covered-and-a-naked-option-writer/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Difference between a Covered and a Naked Option Writer?](https://learn.greeks.live/wp-content/uploads/2025/10/Fractalized-Digital-Asset-Exchange-Mechanism-Representing-Volatility-Surface-Discretization.webp)

Covered writer holds the underlying asset to offset risk; Naked writer does not, facing potentially unlimited loss.

### [What Is the Primary Risk for a Short Seller of a Naked Call Option?](https://learn.greeks.live/path/what-is-the-primary-risk-for-a-short-seller-of-a-naked-call-option/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Primary Risk for a Short Seller of a Naked Call Option?](https://learn.greeks.live/wp-content/uploads/2025/10/Chrome-Finial-Intersection-Above-Neglected-Digital-Asset-Ledger-Reflecting-Market-Volatility.webp)

The primary risk for a naked call seller is theoretically unlimited loss if the underlying asset's price rises significantly.

### [Explain the Fundamental Difference between a Call Option and a Put Option](https://learn.greeks.live/path/explain-the-fundamental-difference-between-a-call-option-and-a-put-option/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Explain the Fundamental Difference between a Call Option and a Put Option](https://learn.greeks.live/wp-content/uploads/2025/10/Refraction-Dynamics-of-Glass-Geometries-Simulating-Volatility-Surface-Skew-in-Digital-Asset-Options.webp)

Call options are the right to buy; put options are the right to sell the underlying asset at a set price.

### [How Does Selling a Naked Put Relate to a Belief about the Underlying Asset's Price?](https://learn.greeks.live/path/how-does-selling-a-naked-put-relate-to-a-belief-about-the-underlying-assets-price/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does Selling a Naked Put Relate to a Belief about the Underlying Asset's Price?](https://learn.greeks.live/wp-content/uploads/2025/10/Complex-High-Fidelity-Simulation-of-Tokenized-Asset-Winglet-Actuator-Dynamics-For-Option-Hedging-Strategies.webp)

It is a bullish or neutral strategy, reflecting the belief that the asset's price will not fall below the strike price.

### [What Does a Delta of -0.80 on a Bitcoin Put Option Indicate?](https://learn.greeks.live/path/what-does-a-delta-of-0-80-on-a-bitcoin-put-option-indicate/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Does a Delta of -0.80 on a Bitcoin Put Option Indicate?](https://learn.greeks.live/wp-content/uploads/2025/10/Futuristic-Metallic-Concentric-Structure-Encapsulating-a-Translucent-Volumetric-Derivative-Asset.webp)

The put option is ITM, gains $0.80 per $1 Bitcoin price drop, and has an 80% chance of expiring ITM.

### [How Does the Intrinsic Value of a Put Option Differ from a Call Option?](https://learn.greeks.live/path/how-does-the-intrinsic-value-of-a-put-option-differ-from-a-call-option/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Intrinsic Value of a Put Option Differ from a Call Option?](https://learn.greeks.live/wp-content/uploads/2025/10/Dynamic-Aperture-Mechanism-Visualizing-Open-Interest-Contract-Settlement-in-Decentralized-Exchanges.webp)

Put intrinsic value is max of zero or strike price minus underlying price; call is underlying minus strike.

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**Original URL:** https://learn.greeks.live/learn/how-does-a-naked-put-option-expose-a-trader-to-risk/
