Put Options: Third Lesson




A put option is the right, but not the obligation, to sell a security (stock, ETF or currency) at a certain price (strike price) on or before a certain date (expiration). One option allows the buyer one hundred shares of the underlying security.

What is a Naked Put?

A naked put is an options strategy in which the investor writes, or sells, put options without holding a short position in the underlying security.

Jay bought one $1.67 naked put option of American Airlines at $12 strike price and four week expiration. The share price is $10.67


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