Buying A Put Option Would Protect You From -

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The put increases in value (or allows the sale at the strike), offsetting the losses on your actual shares. buying a put option would protect you from

The primary reason investors buy puts is to hedge against a drop in a stock's value. If you own 100 shares of a company at $50 and buy a put option with a $45 strike price, you have guaranteed that you can sell your shares for at least $45. Even if the stock crashes to $10, your exit price is locked in. 2. Market Volatility and "Black Swan" Events AI responses may include mistakes

If a stock you own has doubled in value, you might be worried about a correction but don't want to sell yet because you think it could go higher. Buying a put "locks in" a floor for those unrealized gains, allowing you to stay in the trade for more upside while removing the risk of losing the profit you’ve already made. The Trade-Off: The Premium The primary reason investors buy puts is to