The owner has the right but not the obligation to sell off the underlying asset. #2 – Short Put Option (Sell)Ī short put is termed when the investor sells such an option or is also called writing a put Writing A Put Writing put options refer to the opportunity availed by an investor to own and sell an underlying asset at an exceptional pre-determined price on a future date.
read more thereby protects the investor from any downfall or running in loss. The right is to buy or sell an asset on a specific date at a specific price which is predetermined at the contract date.
The option Option Options are financial contracts which allow the buyer a right, but not an obligation to execute the contract. It is usually bought if the investor anticipates that the underlying asset will fall during a certain time horizon. Long put is termed when the investor buys a put.
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Types of Put Options #1 – Long Put Option Long Put Option Long put is a strategy used in options trading by the investors while purchasing a put option with a common belief that particular security's price shall go lower than its striking price before or at the arrival of the date of expiry. This is essential to protect the underlying asset from any downfall of the underlying asset anticipated for a certain period of time or horizon. Put Option is a contract that gives the buyer the right to sell the option at any point in time on or before the date of contract expiration.