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Buying put options: gives the buyer the right but not the obligation to sell his shares.

For e.g. an investor bought a companyโ€™s shares at $40/share and rises to $50/share. However he sees that the price has a chance of falling. He can use put options to hedge his long position. For instance, if he buys put options with a strike price of $48/share and the shares fall to $45/share, he can choose to sell his shares at $48/share by exercising the option or sell the put options for a profit. ๐Ÿ’ต๐Ÿ“ˆ๐Ÿ’ฐ๐Ÿ’ก
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1 month ago 4

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4 Comments

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