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Put options are one of the two primary option types, with call options being the other.
In this video, I explain the basics of put options in great detail, covering:
– What are put options?
– Intuitively understanding why put option prices change inversely to the stock price
– Put option intrinsic and extrinsic value explained with a real AAPL option
– How put option buyers make and lose money
– Two trade examples of put option purchases (profitable and unprofitable)
– Live demonstration of buying a put option on the tastyworks trading platform
– How put option sellers make and lose money
– Two trade examples of shorting put options (profitable and unprofitable examples)
– Live demonstration of shorting a put option on the tastyworks trading platform
I realize I did not talk about exercising put options in this video, and that’s because options are rarely exercised due to the loss of extrinsic value when exercising an option.
Instead, options traders buy/sell options with the intent of profiting from the price changes of the option contracts, and have no intention of ever exercising the options to convert them into shares.
Be sure to leave a comment down below with any questions you may have!
=== RECOMMENDED VIDEOS/RESOURCES ===
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BEAR PUT SPREAD STRATEGY:
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