Chapter 02 · Section 2.1
Price Fall - Put
FUTURES & FORWARDS CALL OPTIONS PUT OPTIONS
If you expect a
fall in price SHORT SHORT ......
(Bearish)
If you expect a
rise in price LONG ...... ......
(Bullish)
With a put, if you expect the price of the underlying asset to fall, you:
a) take a short position.
b) take a long position.
A put gives its holder the right to sell and its writer the obligation to buy a specified quantity of the underlying asset at a specified price. If you expect higher prices, would you rather buy or sell the underlying?