You would be responsible for buying the stock at $90, so your loss you be $10 per share less the premium you received. Your max loss would be $90 per share less the premium (if the stock went to 0). While the downside seems steep, it's not as bad as if I had bought the 100 additional shares at $100 per share. Key is that I do not write more puts than I am comfortable buying outright. I always have the cash set aside.
8/5/14 at 3:32pm