Put Option

A put option is a contract that gives you the right to sell a stock at a fixed price by a specific date. Think of it as insurance: you're betting the stock price will drop, and the put lets you sell at a higher price than the market offers. You encounter puts when investors want to protect profits or profit from falling prices without owning the stock outright. For example, if you own shares of TechCorp trading at $100 and worry it might crash, you could buy a put option allowing you to sell at $95—protecting you if it drops to $60. You pay upfront for this right (called the premium), but you're not obligated to use it. Puts are riskier than stocks because they expire and can become worthless.