Put OptionsA Put option gives the owner the right, but not the obligation to sell the underlying asset (a commodity or futures contract) at the stated strike price on or before the expiration date. In other words the owner of the Put option can sell the underlying asset to the seller of the option at the strike price. Like with a Call option the buyer must pay a premium to have this privilege call and put options strategy real estate this premium is the most the buyer is liable for and the most they could lose.
As a buyer of Put options we hope the commodity falls in price because this will increase the value of the Put option, allowing us to sell the option later for a higher price than we paid for it. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (November 2015) ( Learn how and when to remove this template message)In finance, a put or put option is a stock market device which gives the owner of a put the right, but not the obligation, to sell an asset (the underlying), at a specified price (the strike), by a predetermined date (the expiry or maturity) to a given party (the seller of the put).
Conversely, a put option loses its value as the underlying stock increases and the time to expiration approaches. For the employee incentive, see Employee stock option. The strike price may be set by reference to the spot price (market price) of the underlying security or commodity on the day an option is taken out, or it may be fixed at a discount or at a premium. Options are usually time limited, and price specific. This means that you have the option to buy the property within a certain time period at a stated price.There are different kinds of options.
The put option writer is paid a premium for taking on the risk associated with the obligation.For stock options, each contract covers 100 shares. Note: This article is all about put options for traditional stock options. If you are looking for information pertaining to put options as used in binary option trading, please read our writeup on binary put options instead as there are significant difference between the two.
Buying Put OptionsPut buying is the simplest way to trade put options. When the optio.