An investor may write put options at a strike price where they see the shares being a good value and would be willing to buy at that price. When the price falls and the buyer exercises their option, they get the stock at the price they want with the added benefit of receiving the option premium.
What is the difference between options and futures?
Both options and futures are types of derivatives contracts that are based on some underlying asset or security. The main difference is that options contracts grant the right but not the obligation to buy or sell the underlying in the future. Futures contracts have this obligation. Is an Options Contract an Asset?
What is the difference between call options and put options?
Call options allow the holder to buy the asset at a stated price within a specific time frame. Put options, on the other hand, allow the holder to sell the asset at a stated price within a specific time frame. Each call option has a bullish buyer and a bearish seller while put options have a bearish buyer and a bullish seller.
