Put

A put option is a contract that gives the buyer the right, but not the obligation, to sell an asset at a specified price (the strike price) on or before a specified date (the expiration date). The seller of the put option is obligated to buy the asset at the strike price if the buyer exercises the option.

Put options are used by investors to protect against losses in the value of an asset. For example, an investor who owns shares of stock may buy a put option on those shares to protect against a decline in the stock price. If the stock price falls below the strike price, the investor can exercise the put option and sell the shares at the strike price, locking in a profit.

Put options can also be used to speculate on the price of an asset. For example, an investor who believes that a stock price is going to fall may buy a put option on that stock. If the stock price does fall, the investor can exercise the put option and sell the shares at the strike price, making a profit.

The price of a put option is determined by a number of factors, including the strike price, the expiration date, the volatility of the underlying asset, and the interest rate.

Put options are a complex financial instrument and should only be used by investors who understand the risks involved.