Stock XYZ stays at $100 or rises. Your option expires worthless. Your total loss is the $200 premium.
Buying a put option gives you the right, but not the obligation, to sell a specific stock at a predetermined price (the strike price) before a certain date (the expiration). buying put options explained
The price at which you can sell the stock. Stock XYZ stays at $100 or rises
Substantial. Theoretically, a stock can go to zero, making your right to sell it at the strike price very valuable. Buying a put option gives you the right,
Imagine Stock XYZ is trading at $100. You buy a $95 Put Option for a $2 premium (total cost $200, as one contract covers 100 shares).
Your goal for the trade (e.g., protecting a portfolio, betting on a crash) Your experience level with options platforms