Put option
A put option is a contract giving its holder the right, but not the obligation, to sell an underlying asset at a specified strike price by expiration.
Build a Robo-Advisor with Python (From Scratch)
A financial contract giving its holder the right, but not the obligation, to sell an underlying asset at a specified strike price before or at expiration.
- How it is used
- Frames tax-loss-harvesting opportunity cost as downside exposure during a 30-day replacement-ETF holding period.
- How deep it goes
- Defines payoff, exercise timing, and American versus European styles, while deferring option-pricing theory and formulas.
- Examples
- Uses an AAPL $130 strike against a roughly $150 market price and a VTI tax-benefit curve.
- What you can do after
- Evaluate/understand how a put gains potential value below its strike and can represent harvesting opportunity cost.
Read how Build a Robo-Advisor with Python (From Scratch) explains put option →
Investing for Programmers
A put option is an option giving its buyer the right, but not the obligation, to sell an underlying asset at the strike price.
- How it is used
- Uses put options as insurance against falling prices and as a practical example of derivative-based risk management.
- How deep it goes
- Defines rights, premiums, strikes, expiration, and seller obligations, but stops short of option pricing or automated analysis.
- Examples
- Uses an API-key analogy and Pedro’s $100 ACME holding protected by a $95 put before earnings.
- What you can do after
- Evaluate a put as downside protection while recognizing premium costs and the distinct risks of writing one.
Related concepts
- optionkind of · A financial option is a derivative contract granting its holder the right, but not the obligation, to buy or sell an underlying asset under specified terms.
- opportunity costequivalent to · Opportunity cost is the value of the best alternative forgone when a choice commits resources to one option rather than another.
- hedginguses · Hedging is a risk-management practice that reduces exposure to adverse outcomes by taking compensating action.
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