A put option gives the holder the right to sell 100 shares of the underlying stock at the strike price by expiration. Puts profit when the stock falls below strike minus premium paid. A $50 put costing $2 breaks even at $48 and profits dollar-for-dollar below. Long puts can be insurance — buying protective puts on stock you own caps losses. Selling cash-secured puts is a strategy to buy stocks below current price: if assigned, you buy at strike; if not, you keep the premium. Like all options, puts have time decay (theta) that erodes value as expiration approaches.
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Put Option
August 22, 2026 · Aditya Gupta
Investing
Related terms
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A 401(k) is an employer-sponsored retirement plan where employees contribute pre-tax salary that grows tax-deferred until withdrawal. The…
Active Management
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