Put option
A contract giving its buyer the right, but not the obligation, to sell 100 shares of the underlying stock at the strike price on or before expiration. Buyers profit when the stock falls well below the strike; sellers collect the premium and accept the obligation to buy shares if assigned.
A put is the market’s basic insurance contract: its value at expiration is the greater of zero and the strike minus the stock price. That makes long puts a defined-cost way to express a bearish view or to hedge shares you already own.
Selling puts is economically similar to agreeing to buy stock at a discount — you keep the premium either way, but you must be genuinely willing to own the shares at the strike. That willingness is the difference between a cash-secured put and an accident waiting to happen.
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