Anatomy of the Long Put
When you are bearish on a stock or ETF, one way to express that view is by buying a put option. The long put is an aggressive, bearish options strategy, but is very easy to understand. By owning a put option you have the right, but not the obligation, to sell shares of that particular stock (or ETF) for the strike price of the option, in the future. Know that every put option controls 100 shares of the underlying.
Buying a put option gives you limited risk, (cost of the option), with limited reward (stocks can’t trade below $0.00).
Option expiration is the same for calls as it is for puts. Monthly option contract’s last day of trading is on the third Friday of the month and expire on Saturday. … Read More »