Long Put

Description

Buying a Put option, expecting a significant price decrease.

Trading Logic

Leveraged bearish bet. Risk limited to premium paid.

Practical Example

Stock at $100. Buy a $95 Put for $3 premium.

P/L Curve

Chart Description
  • X-Axis: Stock price at expiration
  • Y-Axis: Expected P/L ($)
  • Green area: Profit; Red area: Loss