Put Option

A put option is a contract that gives you the right to sell a stock at a set 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 shorting (borrowing stock to sell). They're popular during uncertain times. For example, if you own shares of TechCorp trading at $100, you might buy a put option allowing you to sell at $95 by next month—protecting yourself if the price crashes. You pay upfront for this right, called a premium, which you lose if you never use it.