Going short in an option means to sell a Call or Put option. The maximum profit in a Short option trasaction is limited to the amount of premium received.

A Short Call option is favourable when there is a high probability of fall in the price of the underlying. Similarly, a Short Put option is favourable when there is a high probability of rise in the price of the underlying.

However in case the movement happens otherwise, the loss from a short option transaction may be unlimited*

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