Glossary
Put option: meaning, example and why it matters
A contract that gives the buyer the right, but not the obligation, to sell an underlying asset at a fixed strike price on or before expiry.
Worked example
A put with a ₹500 strike bought for a ₹15 premium. If the stock is at ₹460 at expiry the put is worth ₹40 (500 − 460), a ₹25 gain per share after the premium. Above ₹500 it expires worthless and the ₹15 is lost.
Illustrative numbers for explanation only. They are not market data, a forecast or a suggestion.
Why it matters
A put gains value when the underlying falls below the strike, so it is often used to understand protection against falls. It still costs the premium.
Related terms
See it in practice
Frequently asked questions
What is the most a put option holder can lose?
The premium paid. The holder is not obliged to exercise.
Is this page investment advice?
No. Put option is explained in general terms with illustrative numbers. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser.
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Educational content, not investment advice. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser. Spotted a mistake? Email marketdekho01@gmail.com.