Stocks For Dummies Details
When you buy a put option,
you’re hoping that the price of the underlying stock falls. You make
money with puts when the price of the option rises, or when you exercise
the option to buy the stock at a price that’s below the strike price
and then sell the stock in the open market, pocketing the difference.
By buying a put option, you limit your risk of a loss to the premium that you paid for the put.
If, for example, you bought an ABC December 50 put, and ABC falls to $40 per share, you can make money either by selling a put option that rises in price or by buying the stock at $40 on the open market and then exercising the option, thus selling your $40 stock to the writer for $50 per share, which is what owning the put gave you the right to do.
If, for example, you bought an ABC December 50 put, and ABC falls to $40 per share, you can make money either by selling a put option that rises in price or by buying the stock at $40 on the open market and then exercising the option, thus selling your $40 stock to the writer for $50 per share, which is what owning the put gave you the right to do.
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
Stocks For Dummies
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