A put option gives you the right to SELL a stock at a certain price 📉

Imagine you buy a put option for one share of Tesla stock with a strike price of $600 per share 🚗

This put option gives you the right to sell one share of Tesla for $600 in the future!

For example, if Tesla’s stock price drops to $500, you can exercise your put option to first buy it for $500 then immediately sell it for $600, making a $100 profit 💰

But if Tesla’s stock price stays above $600, you can’t use your option, and you’ll lose the premium you paid for the option unless you sell it to someone else 💵

Put options are useful when you think a stock’s price will fall because they essentially lock in a higher sale price 📊