An investor would sell a put option if their outlook on the underlying was bullish, and would sell a call option if their outlook on a specific asset was bearish.
Learn how the wheel options strategy can help you generate income by selling cash-secured puts and then selling covered calls if the stock is assigned.
A collar, also known as a hedge wrapper, is an options strategy that protects against large losses, but it also limits potential profits.
A bull put spread is an income-generating options strategy that is used when the investor expects a moderate rise in the price of the underlying asset.
Put options are a classic hedging instrument that investors use to reduce their exposure to risk if an asset in their portfolio loses value.
A strangle is a popular options strategy that involves holding both a call and a put on the same underlying asset. It yields a profit if the asset's price moves dramatically either up or down.
A synthetic call is an options strategy where an investor, holding a long position, purchases a put on the same stock to mimic a call option.
A synthetic put is an options strategy that combines a short stock position with a long call option on that same stock to mimic a long put option.
Put options are a fundamental investment strategy for options trading. Learn how put options work, different strategies, and the risks involved.
The basic features of a put option are as follows: ; Premium: The purchase price of an option. Paid by buyers, received by sellers. ; Multiplier: Each standard option contract covers a hundred shares. An option with a premium of $1 is worth $100, as it covers 100 shares. ; Strike price: The pre-determined price at which the investor may sell shares if he chooses to exercise the contract.