When you buy a put option, the decision to exercise the option or sell it depends on your strategy and the market conditions:
- Exercising the Option: If you decide to exercise the put option, you would notify your broker to exercise the option, which means you would sell the stock at the strike price, even if you don't own the shares at the moment. This action would close your option position and lock in a profit if the stock price is below the strike price.
- Selling the Option: Alternatively, you can sell the put option contract without exercising it. This would close your position without requiring you to own the shares. Selling the option contract early, before it expires, can be beneficial if you believe the stock price will not drop significantly or if you want to realize profits from the premium you paid for the option.
In summary, you have the choice to either exercise the put option and sell the stock at the strike price or sell the option contract itself. The decision should align with your investment strategy and the current market outlook for the stock.
6/15/2024 06:44pm
