What Is Buy Put Option ✪

The final day the option contract is valid. How Buying a Put Works (With Examples)

Imagine stock XYZ is trading at $100. You believe it will drop soon. what is buy put option

The cost you pay to buy the option; this is also your maximum potential loss. The final day the option contract is valid

The set price at which you can sell the stock, regardless of its current market value. The cost you pay to buy the option;

When you buy a put, you are essentially betting that the stock price will fall below the strike price before the expiration date. Example: Speculating on a Drop

The stock drops to $90. You can now sell the stock at the $95 strike price. Your profit is the $5 difference ($95 - $90) minus the $3 premium paid, totaling $2 per share ($200) .