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In finance, a put or put option is a derivative instrument in financial markets that gives the holder (i.e. the purchaser of the put option) the right to sell an asset (the underlying), at a specified price (the strike), by (or on) a specified date (the expiry or maturity) to the writer (i.e. seller) of the put.
A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange as well as stock that is only traded privately, such as shares of private companies that are sold to investors ...
Another very common strategy is the protective put, in which a trader buys a stock (or holds a previously-purchased long stock position), and buys a put. This strategy acts as an insurance when investing long on the underlying stock, hedging the investor's potential losses, but also shrinking an otherwise larger profit, if just purchasing the ...
Put option: A put option gives its buyer the right, but not the obligation, to sell a stock at the strike price prior to the expiration date. When you buy a call or put option, you pay a premium ...
The above is a traditional way of defining ITM, OTM and ATM, but some new authors find the comparison of strike price with current market price meaningless and recommend the use of Forward Reference Rate instead of Current Market Price. For example, a put option will be in the money if the strike price of the option is greater than the Forward ...
ATM straddle can be used for earnings when you are anticipating that the underlying stock will move in a direction by an extent that exceeds the total to purchase both options. [citation needed] Strangle - where you buy a put below the stock and a call above the stock, with profit if the stock moves outside of either strike price (long strangle ...
A short seller borrows stock from a broker and sells that into the market. Later the investor expects to repurchase the stock at a lower price, pocketing the difference between the sell and buy ...
A stock certificate is a legal document that specifies the number of shares owned by the shareholder, and other specifics of the shares, such as the par value, if any, or the class of the shares. In the United Kingdom, Republic of Ireland, South Africa, and Australia, stock can also refer, less commonly, to all kinds of marketable securities. [4]