This right is valid only until the contract's . To acquire this right, the buyer pays an upfront fee called a premium . Key Terminology

The final day the option contract is valid. How Buying a Put Works (With Examples)

You buy one $95 strike put option for a $3 premium. Cost: Total cost is $300 ($3 premium × 100 shares).

A is a financial contract that gives the buyer the right, but not the obligation , to sell an underlying asset (like 100 shares of a stock) at a predetermined price, known as the strike price .

When you buy a put, you are essentially betting that the stock price will fall below the strike price before the expiration date. Example: Speculating on a Drop

The security (stock, ETF, or index) the option is based on.

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