I think the S&P 500 will not drop by more than 10% By February 19th, 2021. $SPY at close was $378.77. 90% of this is $340.89. There are three ways I consider trading this: 1. Sell a Put vertical spread at 340 to 335, currently at $4.68. Max profit: $32, Collateral: $500. 2. Sell a Naked Put at 278. Currently $0.32, Margin Required: $2,812. 3. Sell a Naked Put at 340. Currently $2.05, Margin Required: $3,888.60 Suppose I have $12,000 I would like to invest: 1. Sell 24 spreads, for a max profit of $32*24 = $768. 2. Sell 4 contracts ($2812 * 4 < $12,000), for a max profit of $128. 3. Sell 3 contracts (3,888.60 * 3 < 12,000) for a max profit of $615. My question is : why would anyone sell naked, when the margin requirements are so high? It seems like you would never be able to deploy your capital if you had conviction about where the price was going. Choice 2 is enormously safer than Choice 1, but has the same payoff if correct. Choice 3 is At the same strike as the short leg in 1, but still cannot return as much. Why do people suggest trading naked? The super safe choice has terrible return. The super risky one has worse return than the spread.