Derivatives
Put Option
A put option gives the buyer the right to sell the underlying asset at a predetermined price before expiry. Buyers profit when prices fall.
Example
Buy NIFTY 22000 PE as protection against market fall.
Related terms
Call Option
A call option gives the buyer the right (not obligation) to buy the underlying asset at a predetermined price before expiry. Buyers profit when prices rise.
Strike Price
Strike price is the predetermined price at which an option can be exercised. It determines whether an option is in-the-money or out-of-the-money.