Buy | To Open Put Example

Your maximum risk is capped. You simply lose the $200 you paid to open the position. Why Traders "Buy to Open" Puts

If you already own 100 shares of XYZ, buying this put acts as an insurance policy. No matter how low the stock falls, you are guaranteed the ability to sell at $95. buy to open put example

The price at which you have the right to sell the stock. Your maximum risk is capped