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A contract, purchased for a fee, which gives the buyer the option to sell an asset at a specified strike price within a specified timeframe.
If the asset drops below the strike price minus fees, they buyer profits. He may buy the asset below strike and immediately sell it at the strike price. However, if the price does not decrease substantially, the buyer is penalized because he had to pay a fee for this option and he recoups no cost.
Related Links
Investopedia article on put options
Nerdwallet article on put options
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