Put

A put option is a derivative contract that gives the buyer the right, but not the obligation, to sell a specified quantity of an underlying asset at a predetermined strike price on or before the expiry date. Investors buy puts to profit from an anticipated decline in the underlying asset's price or to hedge an existing long position against downside risk. In India, put options on the Nifty 50, Bank Nifty, and individual stocks are actively traded on the NSE. The premium paid for a put represents the maximum loss for the buyer, while the potential profit increases as the underlying price falls below the strike.