Put option


An opportunity to buy or sell an underlying instrument.

If you buy a put option, this means you have the right, but not the obligation, to sell the underlying instrument at the agreed strike price on the agreed expiry date (for a European option).

If you sell (write) a put option, this means you have the obligation to buy the underlying instrument at the agreed strike price on the agreed expiry date (for a European option), should the buyer choose to exercise it.

American options can be exercised at any time until the expiration date.

What is a put option?

A put option is a financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specified time frame. It's a way to speculate on the decline of an asset's price or to hedge against a drop in the value of a holding.

Why are put options important to consider when trading?

Put options are important for traders as they provide a mechanism to profit from falling markets or to protect against losses in a declining market. They can be used as a form of insurance against a drop in the price of stocks in a portfolio. Understanding put options allows traders to make strategic decisions in bearish market conditions and manage risk effectively.

Put this into Practice

    Saxo Capital Markets HK Limited
    19th Floor
    Shanghai Commercial Bank Tower
    12 Queen’s Road Central
    Hong Kong

    Contact Saxo

    Select region

    Hong Kong S.A.R
    Hong Kong S.A.R

    Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

    Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

    The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

    The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

    Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.