Short Options

What this video covers

• Why the option writer's maximum gain is strictly limited to the premium received, and why the best case is always expiration worthless
• How the naked short call earns its label as the only plain option position with literally unlimited risk, since the underlying future has no price ceiling
• Why a naked short put is bounded, not unlimited, with maximum loss defined as the strike minus the premium received
• The long-versus-short mirror image: rights versus obligations, premium paid versus earned, margin requirements flipped, and zero-sum payoffs
• The insurance-policy analogy that explains why writers post performance bonds (margin) and buyers do not
• The two memory aids that lock in the call-put distinction and the buyer-writer matchup for test day recall