Put Option Definition

A put option gives the holder the right, but not the obligation, to sell an asset at a specified price before a set expiry date.

What is a Put Option?

Put options are often used to hedge against price declines or to speculate on falling prices.

The buyer pays a premium for this right, while the seller takes on the obligation if exercised.

Buying a put option on a stock allows a trader to profit if the stock's price falls below the strike price.

A pending order is an instruction to buy or sell an asset once the price reaches a specified level, rather than immediately.

A pip is the smallest standardized price movement in a currency pair, typically the fourth decimal place.

A portfolio is a collection of financial assets, such as stocks, bonds, currencies, or commodities, held by an individual or institution.