Covered Put
Also known as: Covered Short
You are short a stock and want to collect premium against the short position, accepting that a sharp reversal could cause large losses
Risk Profile at a Glance
How to Construct the Covered Put
- 1.Short 100 shares of the underlying stock
- 2.Sell 1 put at a strike below the current price
Understanding the Covered Put
The covered put is the bearish equivalent of the covered call. You are short 100 shares and simultaneously sell a put below the current price. The short stock position covers the put obligation — if the stock falls below the put strike, your short stock profits offset the put assignment. Premium collected from the put reduces the effective short sale price.
Maximum profit is limited to the premium received plus the stock decline to the put strike. The main risk is the stock rallying sharply against your short — losses on the short position are theoretically unlimited. This strategy is rarely used by retail traders because it requires margin for short stock positions. It is more appropriate for institutional or advanced traders expressing a tactical bearish view with income enhancement.
The bearish EdgeOS setup (bear count 1 with SCTR below 4) would be the signal context where a covered put makes most sense..
When to Use It — EdgeOS Signal Integration
- ✓Ideal when SCTR < 4 and EdgeOS bear count = 1 (fresh bear trigger)
- ✓Extension score at or above 0.8 with stock near the upper ATR level
- ✓Confirmed or fluid bearish trend — EMA alignment supports the short side
Today's Covered Put Candidates
Updated Aug 27, 2026 · refreshes every 30 minStocks currently showing bearish EdgeOS signals that match Covered Put entry conditions. SCTR > 9 (bullish breadth), extension Tight–Mod (room to run), fresh bull count 1–3.
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Frequently Asked Questions
What is the Covered Put options strategy?
The covered put is the bearish equivalent of the covered call. You are short 100 shares and simultaneously sell a put below the current price.
When should I use the Covered Put?
You are short a stock and want to collect premium against the short position, accepting that a sharp reversal could cause large losses
What is the maximum loss on the Covered Put?
The maximum loss on the Covered Put is theoretically unlimited — the position has an uncovered short leg that can lose without bound if the stock moves against you. Always use strict stop-loss rules.
How does the Covered Put compare to similar strategies?
The Covered Put is a bearish complex strategy. Compared to the Short Naked Call (bearish, credit), the Covered Put has unlimited max risk and limited max reward. Your choice depends on your directional bias, IV environment, and risk tolerance. The TraderValue strategy comparison tool lets you see the exact payoff differences side by side.
What stocks are good Covered Put candidates today?
As of Aug 27, 2026, stocks with bearish EdgeOS signals matching Covered Put conditions include: HTAB (SCTR 3.9, bear b1, Ext extension); BIT (SCTR 3.9, bear b1, Tight extension); USSH (SCTR 3.9, bear b1, Ext extension). These are screened live from 3,000+ symbols and refresh every 30 minutes during market hours. See winstockoptions.com/scans for the full live list.