Buy Put Option Example. To buy a put option, first choose the strike price. Buying put options is a way to hedge against a potential drop in share price.
Difference Between Call and Put Options – Pediaa.Com (Glen Carroll)
In the next lesson you will see a real example and how it works, but for now let's cover the risk. Put options function like a kind of insurance, though investors don't have to own what's being insured — the stock — to buy a put. Usually you choose a put with a strike price that is below the current stock price but where you'd be willing to Protect put trade example.
Selling put options is probably the most popular and widely taught options strategy in the world.
You don't actually have to own the underlying stock to trade options.
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Buying put options is a bearish strategy using leverage and is a risk-defined alternative to shorting stock. Example of protective put (long stock + long put). What Are Call and Put Options?