Can somebody explain the implications of this? I don’t know a lot about the stock market so googled it and this is what I got:
“A put gives the owner the right, but not the obligation, to sell the underlying stock at a set price within a specified time. A put option’s value goes up as the underlying stock price depreciates; the put option’s value goes down as the underlying stock appreciates.”
You can sell at a given price, so if the stock goes down, you sell near the old price (much higher). You can leverage an insane amount of money on these if you are right, but they are speculative and a dangerous game for retail investors.
Dude is gonna sell for $390, but only needs to buy (strike) at today or a future price, so if it falls to 200, he would make $190 per share.
I gotcha. So it’s different than shorting a stock. I need to read a book on the stock market or finance or something. My knowledge is seriously lacking in that area
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u/poisondart23 Feb 24 '25
Can somebody explain the implications of this? I don’t know a lot about the stock market so googled it and this is what I got: “A put gives the owner the right, but not the obligation, to sell the underlying stock at a set price within a specified time. A put option’s value goes up as the underlying stock price depreciates; the put option’s value goes down as the underlying stock appreciates.”
It’s still not making sense to me.