What is put option?Put
The right to sell the underlying at the strike price; the lower the stock goes, the more it's worth.
Animation · put option
Learn “put option” in an animated lesson
- Hedging StrategiesHedging Currency Risk: Locking In with Forwards
An exporter won't receive €1 million for 3 months. If the exchange rate falls, the profit vanishes. What are the trade-offs between a forward contract and an FX option?
- Hedging StrategiesHedging with Options: Protective Puts and Collars
Futures lock in both sides; options only block the bad side. See how much it costs to "insure" a stock, and how to save on the premium.
- Options BasicsCall Options
Buying a call: pay a premium to lock in the right to buy at the strike. Drag the price at expiration and watch the payoff curve "bend".
- Options BasicsIn, At and Out of the Money
Drag the stock price and watch a call and a put with the same strike flip between in the money and out of the money.
- Options BasicsPut Options
Buying a put: the right to sell at the strike, like "insurance against a fall". The lower the stock goes, the more it's worth.
- Options BasicsThe Option Seller
The seller of an option gets paid up front but takes on an obligation. Compare the risks of a short call and a short put.
- Options BasicsStrike, Premium and Expiration
Take apart an option contract and see what's written on it: underlying, type, strike price, expiration date, premium and multiplier.
- Options BasicsWhat Is an Option?
Pay a small amount now for the right to buy (or sell) at an agreed price later. Think of it like a deposit on a house.
- Options: Next StepsThe Four Basic Positions
Compare long call, short call, long put and short put side by side, and tweak the payoff curves in real time.
Related terms
See how “put option” works for yourself with an animation you can drag and play.
Go to “Hedging Currency Risk: Locking In with Forwards”