Naked put, or short put, options are options that are sold. The option seller collects premium when the option is sold and in return must purchase shares of the underlying security at the strike price if the option is exercised. Selling naked puts is a bullish strategy....

If the market price of the underlying security is less than the option's strike price, the option seller keeps the premium from selling the option but must purchase shares of the underlying security at a price greater than the market price at expirastion. This leads to a potentially substantial loss.

If the market price of the underlying security is greater than or equal to the option's strike price, the option is not automatically exercised and the option seller keeps the premium.