Long Put
The long put is an options strategy where an investor purchases a put option, expecting the price of the underlying asset to decrease significantly below the strike price before expiration. Key features include:
- Profits from a decrease in the price of the underlying asset below the strike price.
- Maximum profit potentially unlimited if the underlying asset's price drops significantly.
- Maximum loss limited to the premium paid for the put option.
This strategy is used when the investor has a bearish outlook on the underlying asset.