Why trade it ?

Jul 9 18:23

Put options' prices is likely to rise if its underlying stock falls

Generally, a put option and its underlying stock move in opposite directions. So if you're bearish on the stock, you may consider buying its puts.

Speculation

Options can provide leverage. This means if the underlying stock moves downward, the rise in its put price could be bigger; similarly, if the underlying stock goes up, the fall in its call price could be greater, too. So puts can be used for speculation.

Limited loss

The maximum potential loss for buying a put is the premium paid, while the maximum profit occurs when the stock price falls to 0. The max gain is the strike price * the number of shares covered - the cost of buying the put.

This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. Read more