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  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<h2>What is a Put Option?</h2><p>A <strong>put option</strong> is a contractual agreement between the buyer and the seller of the option that gives the right, but not the obligation, for the put holder to force the seller of the put to purchase the underlying security at the <a title=\"Option Strike Price\" href=\"http://www.mysmp.com/options/strike-price.html\">strike price</a> on the <a title=\"Optio&lt;h2&gt;What is a Put Option?&lt;/h2&gt;&lt;p&gt;A &lt;strong&gt;put option&lt;/strong&gt; is a contractual agreement between the buyer and the seller of the option that gives the right, but not the obligation, for the put holder to force the seller of the put to purchase the underlying security at the &lt;a title=\" href=\"/options/strike-price.html\">strike price</a> on the <a title=\"Options Expiration Week\" href=\"/options/options-expiration-week.html\">options expiration date</a>.&nbsp; The buyer of a <strong class=\"normalize\">put option</strong> believes that the stock may move lower and therefore, decides to purchase the insurance to protect the downside risk and thereby locks in a sales price if the stock moves lower.&nbsp; See the <a title=\"Option Risk Characteristic\" href=\"/options/options-risk-characteristics.html\">option risk profile of a put</a> to understand the risks and rewards.</p><p>Puts may also be used for speculative purposes; if you short a put without it being a part of a larger strategy, this is called a <a href=\"/options/naked-puts.html\">\"naked\" put</a>.&nbsp; The seller of a naked put is taking a bet that the stock will move higher and that the premium that was received will expire worthless.</p><p>You can generally say that the price of a put option moves lower as the stock moves higher and visa versa.&nbsp; The risk of buying a put option is merely the amount of money that was paid for the option.&nbsp; However, a put writer, or seller, has unlimited risk.&nbsp; The writer will be responsible for purchasing the stock at a predefined price no matter how low the stock goes.</p><p>&nbsp;</p>', created = 1575629236, expire = 1575715636, headers = '', serialized = 0 WHERE cid = '1:ca9af3d2ba834ed215582139ea59fb43' in /var/www/html/mysmp/includes/cache.inc on line 109.
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    Put Option

    What is a Put Option?

    A put option is a contractual agreement between the buyer and the seller of the option that gives the right, but not the obligation, for the put holder to force the seller of the put to purchase the underlying security at the strike price on the strike price on the options expiration date.  The buyer of a put option believes that the stock may move lower and therefore, decides to purchase the insurance to protect the downside risk and thereby locks in a sales price if the stock moves lower.  See the option risk profile of a put to understand the risks and rewards.

    Puts may also be used for speculative purposes; if you short a put without it being a part of a larger strategy, this is called a "naked" put.  The seller of a naked put is taking a bet that the stock will move higher and that the premium that was received will expire worthless.

    You can generally say that the price of a put option moves lower as the stock moves higher and visa versa.  The risk of buying a put option is merely the amount of money that was paid for the option.  However, a put writer, or seller, has unlimited risk.  The writer will be responsible for purchasing the stock at a predefined price no matter how low the stock goes.

     

    Tim Ord
    Ord Oracle

    Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide...

    Tradingsim.com
    Day Trading Simulator

    Tradingsim.com provides the ability to simulate day trading 24 hours a day from anywhere in the world. TradingSim provides tick by tick data for...

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