A put writer is a seller of a put option contract. If an investor writes a put, it typically means they agree to buy an underlying security if specific conditions are met in the future – such as a stock’s market price hitting a specific price called a “strike price”.
Most investors who write put options do so in order to make more money for their portfolio. The best case scenario for a put writer is that the underlying security rises in value or remains the same. If it instead falls, the put writer will be obligated to buy the security for the previously agreed-upon higher price, which is more than the security is currently worth.
Writing put options is a tool for more seasoned investors, but by educating yourself on FlashCourse, you can get up to speed on how you might do it yourself. Get the free FlashCourse app for iOS and Android to learn more.
Put Writing Slam Dunks
Chapters In This Course Include…
- Writing Puts
- Min and Max Gains
- Choices at Expiration
- Closing Transactions
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