What is Put Option?

Question

What is Put Option?

Accepted Answer

A **Put Option** is a financial derivative contract that grants the holder the **right**, but not the obligation, to sell an underlying asset, such as a currency pair, at a specified price (the strike price) on or before a specific expiration date.

Put Option

What is Put Option?

What is the primary function of a Put Option in Foreign Exchange (FX) trading and how does it serve as a hedging tool?

How is the value of a Put Option determined, and what are the key factors influencing its premium?

How does a Put Option in the FX market differ from one used in the equity market?

When is a "protective put" strategy used, and how does it function as a risk management tool in FX?

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