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Ramifications of
Buying Option
Puts |
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Purchasing a option put grants
you the right but
not the obligation
to sell an
underlying stock.
When you buy a put
option you are
not obligated to
sell anything, you
only have the right
to do so by the
expiration date
and at the
strike price.
The price you pay
for the option
premium
is the risk that you
are undertaking. The
rewards could be
potentially
unlimited. The more
a stock falls, the
more rewards you
will pocket. |
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