Option Strategy #13: Long Put Option

Buy A Put

Use the Long Put Option strategy when you are very bearish the market. The more bearish you are

the further out of the money (lower strike price) you should buy. No other position can give you as

much leverage with unlimited profit potential and limited risk.

Look to use a trade like this when prices are falling. At expiration the break even is equal to the

strike price minus the premium paid. Each point the market goes below the break even level, the

profit increases by one point.

Your risk of loss is limited to the premium paid for the option. Your maximum loss occurs if the

market is above the strike price at expiration.

Futures Traders Helping Future Traders