The Short Put
is a strategy that involves selling a Put Option and receiving a premium.
The seller of the option hopes that the stock price does not fall below the break-even point (equal to the Strike minus the Premium) on the expiry date, and in this case the strategy yields a profit.
As with the Short Call
, this strategy is quite risky, as it offers a limited profit, but a potentially huge loss in case the stock price drops to zero at expiry.