The price at which you can sell the stock.
Think of it like an insurance policy for your stocks. You pay a small fee now to lock in a minimum selling price later. How a Put Option Works buying put options explained
Stock XYZ drops to $80. You can sell at $95. Your profit is $13 per share ($15 gain minus the $2 premium). The price at which you can sell the stock
AI responses may include mistakes. For financial advice, consult a professional. Learn more How a Put Option Works Stock XYZ drops to $80
Substantial. Theoretically, a stock can go to zero, making your right to sell it at the strike price very valuable.
You don't have to own the stock to buy a put. If you believe a company is overvalued, you can buy a put option. If the stock price crashes, the value of your put will skyrocket, allowing you to sell it for a significant gain. The Risk and Reward
⚠️ To help you apply this to a specific trade or strategy: The ticker symbol you are watching (e.g., AAPL, SPY)