/biz/ - Business & Finance

>>17955132
1. Don't buy options.
2. Don't buy options.
3. Owning a put means that someone else promised to buy 100 shares at the strike price by that date. So if the current price is less than the strike price, you make money by buying 100 shares at the current price and the guy has to buy them for the strike price in the contract.
Example: Person A writes a PUT contract for XYZ with a strike price of 100. Person B buys the contract for $5 per share. If the price of XYZ goes under $100 like if it goes to $90, then person B can buy 100 shares at $90 and sell them to person A for $100 each. Thus person B spent $500 on the contract then sold his shares for $1000 to person A, making him $500. Person A wrote the contract and gained the $500 from person B, but then had to buy the shares back for $1000, so he lost $500.
4. You are stupid
5. https://www.investopedia.com/terms/p/putoption.asp