[hgibbs]

That's not right either, your downside for selling puts is limited by the strike (worst case is you pay K for a stock worth 0). Short call positions are the ones with unlimited downside (worse case is that you get K but have to cover the cost of arbitrarily high priced underlying).

[Bootvis]

Never mind, misread

[minitoar]

Short option positions which gp is referring to aren’t really...optional. You sold the option to someone else.

[Kranar]

Suppose you sell 1 put for 1 dollar with a strike of 100 dollars. The worst case scenario is that the asset decreases in price to be worth 0 dollars. The buyer of the put then exercises their option to sell the asset to you for 100 dollars, hence in total you lost 99 dollars.

As a general matter, the most you can lose when selling a put is the strike price - premium.

[kortilla]

You’re confusing selling (writing) options, which come with being on the receiving end of the exercise as an obligation.