Are ‘puts’ the same as shorting, where you sell what you don’t have and buy back when the price drops? Did some spread betting and generally got the directions correct, but kept getting closed in short term rises, annoying. Nothing huge though just $1 a pip for fun. Only problem is you are glued to the screen lol.
Not really. Puts are contracts to buy/sell a stock at a certain price. You don’t have an obligation to execute the contract, so you can resell it. The only risk is what you pay in premium.
So if I buy a $35 put on Twitter, and the price is $27, it will be worth $800 (contracts are for 100 shares) at expiration.
Without getting too complicated, if the stock is not lower than $35, your contract expires worthless.
Are ‘puts’ the same as shorting, where you sell what you don’t have and buy back when the price drops? Did some spread betting and generally got the directions correct, but kept getting closed in short term rises, annoying. Nothing huge though just $1 a pip for fun. Only problem is you are glued to the screen lol.
Not really. Puts are contracts to buy/sell a stock at a certain price. You don’t have an obligation to execute the contract, so you can resell it. The only risk is what you pay in premium.
So if I buy a $35 put on Twitter, and the price is $27, it will be worth $800 (contracts are for 100 shares) at expiration.
Without getting too complicated, if the stock is not lower than $35, your contract expires worthless.
Many thanks, will do more research.
Thanks for the reply. Yes I laugh when my dad says he is not gambling kek.