The formal trader’s intention is very clear that the asset chosen will go down, thus the trader chooses the PUT OPTION or DOWN.
PUT OPTION is chosen by the trader when the trader understands that the asset chosen will go down at the time of expiry when compared to the current price. If the trader’s choice is correct then the trader ends up "IN THE MONEY".
Basically, put options give us the best market when it is going down. And that’s the great thought process for most business investors to achieve satisfied profit.
When the business investors choose a put option it gives you the right decision (but not the obligation) to sell a specific stock at a specific price (strike price) per good share within a specific time frame. The best way to remember is that you have the right to stock to somebody.
A put option is a secured way to that you buy an option when you think the price of a stock or index is going to go down. More specifically, a put option is the right to SELL 100 shares of a stock or an index at a certain price by a certain date. That "certain price" is known as the strike price, and that "certain date" is known as the expiry or expiration date.
Not a suddenly, buyers and sellers have different goals. Buyers hope that the price of the underlying instrument drops so they can sell at the best price, which is higher than the market price. This way, they could offset the price of the premium, and hopefully make a profit as well.
The most use of a Put Options it is a type of insurance. In the protective put, the investor buys enough puts to cover his holdings of the underlying so that if a drastic downward movement of the underlying's price occurs, he has the option to sell the holdings at the strike price. Another use is for speculation: an investor can take a short position in the underlying stock without trading in it directly.
The client of a placed choice pays a premium to the writer (the time period given for the vendor) to shop for the choice. If the consumer does not exercise the option via promoting the asset earlier than the option expires, it will cancel and the author will take the top rate as income.
As such, the writer of a name alternative is expecting that the asset they have agreed to sell will now not drop in price past the strike price. The consumer is looking ahead to that it's going to.