PUT Options Explained | Stock Market Investing

Put options have been one of the more advanced things that we have talked about a lot on the show but always seem to lose everyone so we took a moment in a previous live stream to share with you the idea of PUTs and knowing how they work.

In finance, a put or put option is a financial market derivative instrument which gives the holder the right to sell an asset, at a specified price, by a specified date to the writer of the put. The purchase of a put option is interpreted as a negative sentiment about the future value of the underlying stock.

What you read there might seem like a mouthful but simply put (pun intended), its when someone is paying you or selling you the right to get the stock at the price that you are designating for that date or the strike price.

This is a little more advanced when it comes to trading as it does take a bit of money to do it depending on the stock you are looking at. Each contract that you do for put options is 100 shares of the stock that you are looking at. So as the example in the video, if you were to want a contract of AutoZone which was trading roughly at $1250, you would be paying $125,000 for the contract.
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Video editing by Rohan and Sharvari (The Tweaky Tales)

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