Option Basics Part 4 – Put Option Seller perspective

WHAT IS A LONG PUT?

A long put refers to buying a put option, typically in anticipation of a decline in the underlying asset. The term “long” here has nothing to do with the length of time before expiration but rather refers to the trader’s action of having bought the option with the hope of selling it at a higher price at a later point in time. A trader could buy a put for speculative reasons, betting that the underlying asset will fall which increases the value of the long put option. A long put could also be used to hedge a long position in the underlying asset. If the underlying asset falls, the put option increases in value helping to offset the loss in the underlying.

• Investors go long put options if they think a security’s price will fall.
• Investors may go long put options to speculate or hedge a portfolio.
• The downside risk is limited using a long put options strategy.

Premium Put Option Option Basics Part 4 Seller side 01 hat collection Seller perspective Put Option Definition – Seller perspective 02 Option2Pro Option Chain At the money Option and Risk 01 Expiration Date Implied Volatility in action 02 - Investors go long put options if
they think a security’s price will fall. - Investors may go long put options to
speculate or hedge a portfolio. Put 4200 ESZ21 Live Trading Example Sell put option on ES Future contract 01 Pricing Models Break-even point Strategies 02 Option2Pro A long put refers to buying a put option, typically in
anticipation of a decline in the underlying asset. Selling Put

• Investors go long put options if they think a security’s price will fall.
• Investors may go long put options to speculate or hedge a portfolio.
• The downside risk is limited using a long put options strategy.

LEARNING OUTCOMES

• PUT OPTION – SELLER PERSPECTIVE.
• OPTION CHAIN – SELLER PERSPECTIVE.
• LIVE TRADING EXAMPLE.