Futures and Options (13)

Put Options (2)

Let's say the price of YYY starts to slip to $12.

You buy a put option for 1,000 YYY stock with a strike price of $10.

If the YYY share price keeps falling before the expiry date of your option,

you could exercise your right to sell your YYY shares at $10 a share, no matter what the market price falls to.

Or you could hold your YYY shares and close your position by selling your put option.