What Is Buy Put Option May 2026

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

The security (stock, ETF, or index) the option is based on. what is buy put option

The cost you pay to buy the option; this is also your maximum potential loss. The stock stays at $100 or rises

Imagine stock XYZ is trading at $100. You believe it will drop soon. what is buy put option

Buying a put option is a powerful bearish strategy used by investors to profit from a stock's decline or to "insure" their existing portfolio. Unlike buying a stock where you want the price to go up, buying a put option increases in value as the underlying asset’s price drops. What is a Put Option?