Want to know what a put option is? When the market is **, you can profit from put options, want to know more about put options? Hurry up and click on the article and let's go together!
1. What is a put option? The above material ** in: Caishun OptionsPut options, that is, put options, are equivalent to short on the underlying asset, if you buy a put option of a **, it means that you are bearish on this **, and hope that this *** has done margin trading for the short underlying asset should be more familiar. Because both securities borrowing and putting options are ** short tools. As an investor, you should track and monitor options transactions in a timely manner. Once you have purchased a put option, you need to keep an eye on market conditions and movements in the underlying asset**. If the market changes differently than expected, take timely action, such as closing a position or adjusting**.
2. Classification of put options
1. Put option: Put option refers to the buyer's right to pay a premium to obtain the right to sell a certain amount of a specific commodity to the option holder at a specific level. Put options tend to anticipate that the market will be.
2. Sell put options: Selling put options is a more conservative strategy. In general, selling an option will profit from a decrease in volatility. If the counterparty exercises, the put seller needs to take a short position in the underlying.
For the party of the put option, if the market price is lower than the exercise, it means that it can sell the underlying to obtain the difference income, if the difference is greater than the premium cost, then the buyer of the put option is profitable. For the party who sells the put option, the profit and loss profile is completely opposite to that of the buyer. The maximum premium income received by the seller at the moment of selling the option is its maximum income. Reminder: Put positions are short, and sell call positions are long.
3. How to use put options?
* The operation of a put option: to buy a put option contract, that is, to pay a premium in order to obtain the right to sell the underlying asset at a specific ** time in the future.
Risk: The buyer's maximum loss is the premium paid, but the potential gain is unlimited as the underlying asset may reach any level.
The act of selling a put option: Selling (writing) a put option contract, i.e., receiving a premium, but assuming the obligation to sell the underlying asset at the time of execution** in the future.
Risk: The seller's maximum loss is *** to zero on the underlying asset. The premium collected is the seller's maximum profit.
PS: As an investor, you should continue to learn and improve your understanding and skills of the options market, and maintain a cautious and calm mind to trade. Finally, the above views are for reference only, not as a basis for trading, and profits and losses are at your own risk. The market is risky, and investors need to be cautious.