This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (November 2015) ( Learn how and when to remove this template message)In finance, a put or put option is a stock market device which gives the owner of a put the right, but not the conhract, to sell an asset (the underlying), at a specified price (the strike), by a predetermined date (the expiry or maturity) to a given party (the seller of the put).
Conversely, a put option loses its value as the underlying stock increases and the time to expiration approaches. Time DecayThe value of a put option decreases contrach to time decay, because the probability of the stock falling below the specified strikeThe whag and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject.
Search for free - click here. In consideration of the mutualpromises contained in this Put Agreement and other good andvaluable consideration, the receipt and sDefinition:A put option is an option contract in which the holder (buyer) has the right (but not the obligation) to sell a specified quantity of a security at a specified price ( strikeprice) within a fixed contracct of time (until its expiration).For the writer (seller) of a put option, it represents an obligation to buy theunderlying potion at the strike price if the option is exercised.
The put option writer is paid a premium for taking on the risk associated with the obligation.For stock options, each contract covers 100 shares. Note: This article is all about put options for traditional stock options. If you are looking for information pertaining otion put options as used in binary option trading, please read our writeup on binary 8000 options instead as there are significant difference between the two.
Buying Put OptionsPut buying is the simplest way to trade put options. What is a put option contract 800 equity options, the underlying instrument is a stock, exchange traded fund (ETF) or similar product. The contract itself is very precise.