How can one profit from a decrease in the price of a stock without actually owning the stock by buying put options?

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1264583

2026-03-12 22:50

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By purchasing put options, an investor can profit from a decrease in the price of a stock without actually owning the stock. Put options give the holder the right to sell the stock at a specified price, allowing them to make a profit if the stock price falls below that price. This strategy is known as "shorting" the stock through options trading.

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