Trading: Put Option

The ‘Put’ Calculator

A put option gives you the right, but not the obligation to sell an underlying asset at a set date in the future.

When you buy a put option, you pay a premium for the contract, the premium is the initial outlay and total loss you can incur on the trade.

A put option is a bearish position on the market it is placed on. The benefits of using a put option is the ability to gain a leverage exposure to a stock with a predefined maximum lost which is the premium.

Put options are commonly used as ‘insurance’ on a portfolio of shares to protect against a sharp movement lower in equity markets.

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