Angie · learn
Put option
The right to sell at the strike price. It gains value as the underlying falls, which makes it the standard way to buy insurance on a position.
Updated 2026-09-05
A put gives you the right to sell the underlying at the strike price until expiry. It gains value as the price falls, which makes it the standard instrument for insuring a position you want to keep.
The insurance framing is the useful one. Buying a put below your entry price caps your loss for a known cost, exactly like an excess on a policy, and like a policy it expires and has to be renewed. Doing it continuously is expensive, which is precisely why the seller is willing to write it.
See also
- Call option — The right to buy at the strike price. It gains value as the underlying rises, and it expires worthless if the underlying never gets there.
- Strike price — The price at which an option can be exercised. Its distance from the current price determines almost everything about how the option behaves.
- Cash-secured put — Selling a put with the cash set aside to buy the shares if assigned. You are paid to agree to buy at a price you were happy with anyway.
Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.
