It is impossible for a producer who sells put options to lose more than the price of the option premium.

Question

Quizplus · Accepted Answer

While the price of the option premium is the maximum possible loss for the producer, if the market moves heavily against them, the potential losses could exceed the premium paid. In fact, the loss could be theoretically unlimited if the stock price keeps dropping, since the option seller is obligated to buy the stock at the strike price, regardless of how low it may fall.

It Is Impossible for a Producer Who Sells Put Options