Quick View: What Are Put Options

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I'm talking put options today.

We use put options when we believe a stock is going down.

It's a contract that gives the owner the right, but not the obligation, to sell a specified amount of an underlying security at a pre-determined price all within a specified time frame.

Meaning...you can force someone to buy a stock, even if you don't own it, for a specific price.

Let's look at an example:

You bought a stock trading for $100 and you have an option saying you can put this stock to a person at $95...but then the stock happens to fall to $60. You can now force someone to buy those contracts at your $95 price.

This is how you make money on the downside.

Pretty sweet, right?

Learn to Trade Options - Click here

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