Long Put
An investor might use a long put option position when the share price or market is expected to decline.
A put option allows an investor to pay a fixed premium for the right, but not the obligation, to sell an asset at a predetermined price until expiration. The long put strategy might be useful for an investor who is bearish on either the market or the price of a specific stock. Investors going long puts may profit if the price of the underlying shares falls below the combined value of the strike price and the net cost of the option.
Watch our Traders' Academy video to find out more about Bear Market - Long Puts.
Options involve risk and are not suitable for all investors. For more information read the “Characteristics and Risks of Standardized Options” that you can find on the OCC website.