What is the primary motivation behind selling a put option?

To benefit from a bearish market outlook To hedge against potential losses in a long position To collect premiums and capitalize on a bullish market view To speculate on the volatility of the underlying asset

When is a put option seller considered profitable?

When the spot price falls below the strike price When the spot price rises above the strike price When the spot price remains at the strike price When the implied volatility of the underlying asset increases

What is the potential loss for a put option seller?

Limited to the premium received Limited to the difference between the strike price and the spot price Unlimited Dependent on the implied volatility of the underlying asset

What is the breakdown point for a put option seller?

The point where the put option seller starts making a profit The point where the put option seller starts making a loss The point where the put option seller breaks even The point where the implied volatility of the underlying asset exceeds a certain threshold

What is the formula for calculating the profit or loss (P&L) from selling a put option?

P&L = Premium Received + Max [0, (Strike Price - Spot Price)] P&L = Premium Received - Max [0, (Strike Price - Spot Price)] P&L = Max [0, (Strike Price - Spot Price)] - Premium Received P&L = Max [0, (Spot Price - Strike Price)] - Premium Received