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1. www.nerdwallet.com › article › investingPut Options: What They Are, How They Work and How to Trade ...

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   Aug 26, 2024 · A put option ("put") is a contract that gives the owner the right to sell an underlying security at a set price (“strike price”) before a certain date (“expiration”). The seller sets the ...

2. www.investopedia.com › terms › pPut Option: What It Is, How It Works, and How to Trade Them

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   • What Is A Put Option?
   • How A Put Option Works
   • Where to Trade Options
   • Alternatives to Exercising A Put Option
   • Example of A Put Option
   • Writing Put Options
   • The Bottom Line

   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 can sell the underlying security is called the strike price. Put opt...

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   A put option becomes more valuable as the price of the underlying stock or security decreases. Conversely, a put option loses its value as the price of the underlying stock increases. As a result, they are typically used for hedging purposes or to speculate on downside price action. Investors often use put options in a risk management strategy know...

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   Put options, as well as many other types of options, are traded through brokerages. Some brokers have specialized features and benefits for options traders. For those who have an interest in options trading, there are many brokers that specialize in options trading. It’s important to identify a broker that is a good match for your investment needs.

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   The buyer of a put option does not need to hold an option until expiration. As the underlying stock price moves, the premium of the option will change to reflect the recent underlying price movements. The option buyer can sell their option and either minimize loss or realize a profit, depending on how the price of the option has changed since they ...

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   Assume an investor buys one put option on the SPDR S&P 500 ETF (SPY), which was trading at $445 (January 2022), with a strike price of $425 expiring in one month. For this option, they paid a premium of $2.80, or $280 ($2.80 × 100 shares or units). If units of SPY fall to $415 prior to expiration, the $425 put will be “in the money” and will trade ...

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   In the previous section, we discussed put options from the perspective of the buyer, or an investor who has a long put position. We now turn our attention to the other side of the option trade: the put option seller or the put option writer, who has a short put position. Contrary to a long put option, a short or written put option obligates an inve...

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   Put options allow the holder to sell a security at a guaranteed price, even if the market price for that security has fallen lower. That makes them useful for hedging strategies, as well as for speculative traders. Along with call options, puts are among the most basic derivative contracts.

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3. Videos

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     Put Options Explained: Options Trading For Beginners

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     Put Option: What It Is, How It Works, and How to Trade Them

     Dec 31, 2008

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     Stock Options Explained

     Aug 31, 2018

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4. seekingalpha.com › article › 4515913-what-is-put-optionPut Option: What It Is & How It Works - Seeking Alpha

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   Aug 23, 2023 · What Is a Put Option? Put options are a type of options contract. These contracts allow the owner to sell a security at a specific price before the expiration date listed in the options contract ...

   • Author: Kimberlee Leonard

   • Options can be traded in brokerage accounts. Most brokerages will require the account to be approved for options trading before investors can begin...
   • The long put strategy buys a put with the hope that the investor can sell it for a higher price later on if the underlying asset declines in value....
   • Investors can buy puts on the ETF SPY, which tracks the Standard & Poor’s 500 Index.

5. www.businessinsider.com › investing › put-optionWhat Is a Put Option: Exploring the Fundamentals and Uses

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   Jul 18, 2024 · A put option is a contract that gives the owner the right (but not the obligation) to sell an asset at a predetermined price. The predetermined price is known as the strike price. You can view put ...

   • Founder: Henry Blodget

6. www.investopedia.com › terms › pPut: What It Is and How It Works in Investing, With Examples

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   Aug 15, 2024 · A put is an options contract that gives the owner the right, but not the obligation, to sell a certain amount of the underlying asset, at a set price within a specific time. The buyer of a put ...

7. investinganswers.com › dictionary › pPut Option Definition & Example - InvestingAnswers

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   Oct 7, 2020 · For example, if a trader purchases a put option contract for Company XYZ for $1 (i.e. $01/share for a 100 share contract) with a strike price of $10 per share, the trader can sell the shares at $10 before the end of the option period. If Company XYZ's share price drops to $8 per share, the trader can buy the shares on the open market and sell ...

8. People also ask

   What is a put option?

   • A put option ("put") is a contract that gives the owner the right to sell an underlying security at a set price (“strike price”) before a certain date (“expiration”). The seller sets the terms of the contract. The buyer pays the seller a pre-established fee per share (a "premium") to purchase the contract.

   Put Options: What They Are, How They Work and How to Trade Them

   www.nerdwallet.com/article/investing/put-options

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   What happens when you sell a put option?

   • When you sell a put option, you're placing a bet that the value of the underlying stock will increase or stay the same value over the course of the contract. For a put buyer, if the market price of the underlying stock moves in your favor, you can elect to "exercise" the put option or sell the underlying stock at the strike price.

   Put Options: What They Are, How They Work and How to Trade Them

   www.nerdwallet.com/article/investing/put-options

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   How does a put option affect the value of a stock?

   • A put option becomes more valuable as the price of the underlying stock or security decreases. Conversely, a put option loses its value as the price of the underlying stock increases. As a result, they are typically used for hedging purposes or to speculate on downside price action.

   Put Option: What It Is, How It Works, and How to Trade Them - Investo…

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   What happens if a put option trades below the exercise price?

   • If the stock’s market price trades below the exercise price, the put option has intrinsic value to the buyer, and represents a liability to the option seller. For example, a put writer receives $200 ($2 per share) for a contract of ABC stock with a strike price of $50 per share.

   Put Option: What It Is & How It Works - Seeking Alpha

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   Do you need to own a put option?

   • Each put option contract represents 100 shares of the underlying asset, but investors don't need to own the stock to buy or sell a put. Put options become more valuable as the underlying stock's price falls and loses value when the stock's price rises. Generally, the value of a put option can also decrease as it approaches the expiration date.

   What Is a Put Option: Exploring the Fundamentals and Uses

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   How do put options work?

   • The value of a put increases as the underlying stock value decreases. Put options can be used to try to profit from downturns, or they can be used to protect a portfolio against them. Put sellers (writers) have an obligation to buy the underlying stock at the strike price. This is different from reselling a put you bought. What is a put option?

   Put Options: What They Are, How They Work and How to Trade Them

   www.nerdwallet.com/article/investing/put-options

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9. www.investopedia.com › options-basics-tutorial-4583012Essential Options Trading Guide - Investopedia

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   May 15, 2024 · A $1 increase in the stock’s price doubles the trader’s profits because each option is worth $2. Therefore, a long call promises unlimited gains. If the stock goes in the opposite price ...