Buying Put Options Explained Today

If the stock price falls below your strike price, your option becomes more valuable. You can either exercise the right to sell the stock at that higher strike price or simply sell the option itself for a profit. Why Buy Put Options? Investors generally use puts for two main reasons: 1. Hedging (Insurance)

Stock XYZ drops to $80. You can sell at $95. Your profit is $13 per share ($15 gain minus the $2 premium). buying put options explained

Substantial. Theoretically, a stock can go to zero, making your right to sell it at the strike price very valuable. If the stock price falls below your strike