Sell Put Vs Buy Put at Buying

Sell Put Vs Buy Put. You have to sell at a lower price but limited downside. Buy ibm nov 160 put 2.00 sell ibm nov 155 put 0.75 net cost:

Buying a call, selling a call, buying a put and selling a put. Therefore, you bet by limiting your risk to the option premium and play for the downside in the stock. So unlimited upside and limited downside.

You sell call option when you expect that the upsides for the stock are limited. The buyer has the right to sell the puts, while the seller has the obligation and must buy the puts at the specified strike price. More specifically, it gives the owner of an option contract the ability to sell at a specified price any time before a certain date. Put buying is much better suited for the average investor than short selling because of the limited risk.