A put option (or “put”) is a contract giving the option buyer the right, but not the obligation, to sell—or sell short—a specified amount of an underlying security at a predetermined price within a specified time frame. This predetermined price at which the buyer of the put option ca...
The downside of buying a put is that you lose the premium you paid for it. Buying options means you have to pay the premium price for them. If you do not exercise the option, it expires worthless. So in the case of a put option, if the price of the underlying asset does not drop...
How does a put option decrease in value? One reason the put's intrinsic value is decreasing would be because the stock is rising toward the strike price. What is a put spread? There are multiple strategies for playing puts, such as buying and selling puts on the same stock at the sa...
but not the "obligation", to buy the stock at the strike price. In other words, the owner of the call option (also known as "long a call") does not have to exercise
When buying a put, you usually expect the stock price to fall before the option expires. It can be useful to think of buying puts as a form of insurance against a stock decline. If it does fall below the strike price, you’ll earn money from the “insurance.”...
If an investor holds a put option, then he can make money if the market value of the underlying security falls. If an investor writes a put option, then he can profit if the market value of the underlying security rises or stays relatively the same. ...
This contrasts to a put option in the most that a stock price can go down is to $0. So the most that a put option can ever be in the money is the value of the strike price. What happens to the call options if YHOO doesn't go up to $50 and only goes to $45?
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This unusual and oft-overlooked option trade can pair well with buy-and-hold investing strategies. What is put selling? Put selling means entering into a contract with a put buyer in which the buyer pays you a small amount of money (a “premium”) in exchange for the right, but not...
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