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Buying Puts Explained. Both the price and date must be specified in order to conduct the trade. A put option is an option contract that gives the buyer the right, but not the obligation, to sell the underlying security at a specified price (also known as strike price) before or at a predetermined expiration date.
from venturebeat.com
Hence, vertical spreads involve put and call combination where the expiry date is the same, but the strike price is different. A put option gives the buyer the right to sell the underlying asset at the option strike price. When you buy a put option, you’re buying the right to force the person who sells you the put to purchase 100 shares of a particular stock from you at the strike price.
When you buy a put option, you’re buying the right to force the person who sells you the put to purchase 100 shares of a particular stock from you at the strike price. Simply put (pun intended), a put option is a contract that gives the option buyer the right — but not the obligation — to sell a particular underlying security (e.g. A put option gives the buyer the right to sell the underlying asset at the option strike price. On the other hand selling puts without a strategy or plan can be a recipe for disaster.
