Content deleted Content added
Citation bot (talk | contribs) Add: date. | Use this bot. Report bugs. | Suggested by Whoop whoop pull up | #UCB_webform 636/2166 |
→Writing a put: changed pronouns of buyer |
||
Line 37:
=== Writing a put ===
The writer receives a premium from the buyer. If the buyer exercises
*"Trader A" '''(Put Buyer)''' purchases a put contract to sell 100 shares of XYZ Corp. to "Trader B" '''(Put Writer)''' for $50 per share. The current price is $50 per share, and Trader A pays a premium of $5 per share. If the price of XYZ stock falls to $40 a share right before expiration, then Trader A can exercise the put by buying 100 shares for $4,000 from the stock market, then selling them to Trader B for $5,000.
| |||