What's a Spy Put?
When Traders Are Worried About a Downturn in the Market, They Can Look at Buying Some Protection via Put Options with Spdr S&P 500 (Spy). a Put Option Is a...
When traders are worried about a downturn in the market, they can look at buying some protection via put options with SPDR S&P 500 (SPY). A put option is a financial contract that gives the holder the right, but not the obligation, to sell a certain underlying asset at a certain price on or before expiration.
How does a SPY put work?
Contrary to a long put option, a short or written put option obligates an investor to take delivery, or purchase shares, of the underlying stock. ... If SPY stays above the $260 strike price, the investor would keep the premium collected since the options would expire out of the money and be worthless.
What's a SPY put?
In contrast to shorting, a put option gives the right to sell 100 shares of a security at a specified price by a specified date. That specified price is known as the strike price, and the specified date is known as the expiration date.
Marcus Vance is a cybersecurity auditor and technology writer dedicated to educating the public about online safety, data privacy regulations, enterprise security, and emerging cyber threats.
