Question

The buyer of a put expects the price of the underlying stock to rise. a. true b. false

Answer 1

The buyer of a put expects the price of the underlying stock to rise is a. true

What does buying a put mean?

• Short selling and put options are fundamentally negative methods used to speculate on the underlying securities or index's possible decline.
• Short selling and buying put options are both bearish techniques that increase in profitability when the market falls.
• Short selling is selling a security that the seller does not own but borrows and then sells in the market, with the possibility for substantial losses if the market rises.
• Purchasing a put option grants the buyer the right to sell the underlying asset at the price specified in the option, with the maximum loss being the option premium paid.

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