Put Options

A put option is a financial contract that gives the buyer the right, but not the obligation, to sell a specific amount of an asset (like stocks) at a predetermined price within a certain time frame. Investors buy put options if they believe the asset’s price will decline, allowing them to sell at the higher strike price and potentially profit from the difference. Conversely, sellers of put options collect a premium and may be willing to buy the asset at the strike price if the market price drops. It’s a way to hedge risk or speculate on a price decrease.