The stock stays at $100 or rises. You choose not to exercise the option, and your loss is capped at the $300 premium . The Break-Even Point
To profit, the stock must fall below the strike price by more than the premium you paid. What Are Put Options and How Do They Work? - IG UK
A is a financial contract that gives the buyer the right, but not the obligation , to sell an underlying asset (like 100 shares of a stock) at a predetermined price, known as the strike price .
The security (stock, ETF, or index) the option is based on.
The stock drops to $90. You can now sell the stock at the $95 strike price. Your profit is the $5 difference ($95 - $90) minus the $3 premium paid, totaling $2 per share ($200) .
The set price at which you can sell the stock, regardless of its current market value.
You buy one $95 strike put option for a $3 premium. Cost: Total cost is $300 ($3 premium × 100 shares).
When you buy a put, you are essentially betting that the stock price will fall below the strike price before the expiration date. Example: Speculating on a Drop




The stock stays at $100 or rises. You choose not to exercise the option, and your loss is capped at the $300 premium . The Break-Even Point
To profit, the stock must fall below the strike price by more than the premium you paid. What Are Put Options and How Do They Work? - IG UK
A is a financial contract that gives the buyer the right, but not the obligation , to sell an underlying asset (like 100 shares of a stock) at a predetermined price, known as the strike price .
The security (stock, ETF, or index) the option is based on.
The stock drops to $90. You can now sell the stock at the $95 strike price. Your profit is the $5 difference ($95 - $90) minus the $3 premium paid, totaling $2 per share ($200) .
The set price at which you can sell the stock, regardless of its current market value.
You buy one $95 strike put option for a $3 premium. Cost: Total cost is $300 ($3 premium × 100 shares).
When you buy a put, you are essentially betting that the stock price will fall below the strike price before the expiration date. Example: Speculating on a Drop

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