 Welcome back! In this lesson we're going to go over a covered put. So in a previous lesson we talked about a covered call where you're buying the underlying stock and you're selling a call against that position. This is kind of the reverse. This is the exact opposite of this where we're actually selling stock short and then we're selling a put against that short stock. So this is a bearish strategy. We want implied volatility to be to be fairly high. Optimal timeframe in that 30 to 60 days to expiration. Similar profit target kind of at 25 to 50% of max profit. Our downside risk is none because we profit when the stock goes down. Our upside risk is undefined because the stock theoretically could keep going up and up and up forever, right? Never really happens that way but theoretically. And then the probability of profit is is usually over 55%. So the trade setup is we're simply going to sell short 100 shares of stock and then we're going to sell 130 delta put against that. Time decay in this type of trade works in our favor so it's a positive theta trade. Let's go to the platform take a look at an example. So looking at IWM as our example, again, if this is something that you'd be bearish on, this would be a candidate for a covered put because it's got implied volatility over 50. IV percentile is 56 in this case. So we'd simply go to the trade tab, go over to the put side and remember we want around that 30 delta if it's kind of in between. I like to opt for the higher one so I'd go with the 31 delta. Then we'd simply right click and you sell covered stock. Remember when we bought it we did buy covered stock on the call side. In this case we're selling the put. We're selling the stock so we're going to sell it. So it populates down here so we're selling 100 shares of IWM and we're selling one put at the 130 strike. So we simply right click, analyze that trade and pops up here. So we've got an expiration of 520 and so that's the same one as our expiration here. So that's lined up. We've got our dash mark moved to the break even point so you can see we have a probability of profit between now and expiration of just under 60%. So a little over 55% is what you're typically going to get on this type of a trade. So just like a covered stock kind of works the same way except for opposite. You've got the undefined risk to the upside. Your risk is capped to the downside and that's what helps give you that higher probability. Remember if we were just going to sell this stock short let's analyze that and take a look. We unclick that. Remember this is just a 50-50 bet. If we move our break even there 48-51 about a 50-50 bet and so that's why you would look to potentially do this because yes you're capping your upside potential. However you are increasing your probability of success and over time you're going to be more successful with that higher probability than just simply buying or selling stock outright. So I hope that was helpful. We'll see you in the next lesson.