Published On Jan 17, 2021
Check out my entire playlist on Trading Options here:
• How to Trade Options
Like, Comment, and Share my videos!
🔔 SUBSCRIBE HERE 🔔 http://bit.ly/BroeSubscribe
💯 LET’S CONNECT 💯
📷 Instagram @JakeBroe 👉 / jakebroe
🐦 Twitter @Broe_Jake 👉 / broe_jake
👇 👇 Watch My Other Videos Here 👇 👇
★ How to Swing Trade Stocks (THE BASICS)
• How to Swing Trade Stocks (THE BASICS)
★ My $25,000 Brokerage Account Challenge (2021)
• My $25,000 Brokerage Account Challeng...
★ How to Trade Options (Buying Call Options)
• Buying Call Options Explained - How t...
📷 📷 My YouTube Equipment 📷 📷
► My Camera 👉 https://amzn.to/2UZpFwA
► My Wide-Angle Lens 👉 https://amzn.to/2Qwf3Sq
► My Wireless Microphone 👉 https://amzn.to/2QBV9W0
► My Shotgun Microphone 👉 https://amzn.to/36bdLTv
► My Lighting 👉 https://amzn.to/2F5Ey7V
► My Light Diffusers 👉 https://amzn.to/2tjF8fG
► My GorillaPod 👉 https://amzn.to/2Q94aqI
► My Tripod 👉 https://amzn.to/37kBnVQ
► My SD Card 👉 https://amzn.to/36dP3Sy
================
📚 📚 Books That Changed My Life 📚 📚
📗 How to Win Friends & Influence People 👉 https://amzn.to/2F3ahGC
📕 Dumbing Us Down 👉 https://amzn.to/2spodrZ
📘 Quiet - The Power of Introverts 👉 https://amzn.to/36b2ti3
📙 The Red Queen 👉 https://amzn.to/2QzNW8W
📔 Rich Dad Poor Dad 👉 https://amzn.to/3bliFyP
📒 Why Nations Fail 👉 https://amzn.to/3fWZ3Em
================
What Is a Put?
A put is an options contract that gives the owner the right, but not the obligation, to sell a certain amount of the underlying asset, at a set price within a specific time. The buyer of a put option believes that the underlying stock will drop below the exercise price before the expiration date. The exercise price is the price that the underlying asset must reach for the put option contract to hold value.
A put can be contrasted with a call option, which gives the holder to buy the underlying at a specified price on or before expiration.
The Basics of Put Options
Puts are traded on various underlying assets, which can include stocks, currencies, commodities, and indexes. The buyer of a put option may sell, or exercise, the underlying asset at a specified strike price.
Put options are traded on various underlying assets, including stocks, currencies, bonds, commodities, futures, and indexes. They are key to understanding when choosing whether to perform a straddle or a strangle.
The value of a put option appreciates as the price of the underlying stock depreciates relative to the strike price. On the flip side, the value of a put option decreases as the underlying stock increases. A put option's value also decreases as its expiration date approaches. Conversely, a put option loses its value as the underlying stock increases.
Because put options, when exercised, provide a short position in the underlying asset, they are used for hedging purposes or to speculate on downside price action. Investors often use put options in a risk-management strategy known as a protective put. This strategy is used as a form of investment insurance to ensure that losses in the underlying asset do not exceed a certain amount, namely the strike price.
In general, the value of a put option decreases as its time to expiration approaches due to time decay because the probability of the stock falling below the specified strike price decreases. When an option loses its time value, the intrinsic value is left over, which is equivalent to the difference between the strike price less the underlying stock price. If an option has intrinsic value, it is in the money (ITM).
Out of the money (OTM) and at the money (ATM) put options have no intrinsic value because there would be no benefit of exercising the option. Investors could short sell the stock at the current higher market price, rather than exercising an out of the money put option at an undesirable strike price.
================
#OptionsTrading #BuyingOptions #PutOptions
================
DISCLAIMER:
This video is for entertainment purposes only. I am not a legal or financial expert or have any authority to give legal or financial advice. While all the information in this video is believed to be accurate at the time of its recording, realize this channel and its author makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in this video.
ADVERTISER DISCLOSURE:
Jake is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to www.amazon.com. Additionally, other referral links are included and this channel does receive compensation for sending traffic to partner sites. Shopping through our links is an easy way to support the channel and we appreciate and are super grateful for your support!
