What is Put Option?

Put option is the opposite of a call option, it is an instrument that tracks the price movements of an underlying asset allowing traders to make profits even when the price of a stock declines.

There are two types of put option strategies, long put and short put.

Long put position is taken by buyers who speculate that the price of a stock will fall.

Short put is employed by sellers who speculate that the price of the underlying stock will appreciate or would remain constant above a particular price. This short-selling position indicates a bullish perspective on the market.