# Long Put

Long Put option is the most basic & simplest strategy. It is recommended or implemented when we expect the underlying asset to show significant downside move.

A long put is a basic options trading strategy where a trader purchases a put option, believing that the price of the underlying asset will decline before the option's expiration date. Buying a put option gives the trader the right, but not the obligation, to sell the underlying asset at the strike price until the expiration.

**How It Works:**

1. **Buy a Put Option:** The trader purchases a put option at a specific strike price, paying the required premium.**Potential Profit and Loss:**

- **Maximum Profit:** The profit potential is substantial, with the upper limit being the strike price minus the premium paid (assuming the underlying asset could drop to $0).

- **Maximum Loss:** Limited to the premium paid for the put option.**Benefits:**

- **Profit from Declining Prices:** Offers a way to benefit from a decrease in the price of the underlying asset.

- **Defined Risk:** The maximum possible loss is the premium paid, making it a defined risk strategy.

- **Leverage:** Allows a trader to potentially benefit from price declines without having to short the actual stock, often with less capital outlay.**Drawbacks:**

- **Time Decay:** As expiration approaches, the option's time value decreases, which can erode potential profits if the underlying asset's price doesn't move as expected.

- **Upfront Cost:** The trader must pay the premium upfront, which is lost if the option expires worthless.**Example:**

Imagine stock NIFTY is trading at ₹20000:

1. Buy a ₹19950 put option with a premium of ₹56.45.

If NIFTY drops to ₹19850 by expiration, the trader could exercise the option, selling NIFTY for ₹19850, leading to a profit of ₹43.55 (₹100 intrinsic value - ₹56.45 premium). However, if NIFTY remains above ₹19950 at expiration, the option expires worthless, and the trader's loss is the ₹56.45 premium paid.

In conclusion, a long put is a straightforward strategy favored by traders expecting a decline in an asset's price. It provides the potential for significant profit with a defined maximum risk (the premium paid).

### Other Strategies

## Iron Condor

A strategy designed to profit from low volatility in the underlying asset, combining a bullish put credit spread and a bearish call credit spread to it.

## Iron Butterfly

This is a strategy which profits from low volatility in the price of the underlying asset while minimizing risk.

## Short Strangle

A short strangle is a non directional trading strategy where an investor sells an (OTM) call option and put option on the same underlying asset simultaneously.

## Short Straddle

A Short straddle is considered neutral or non-directional because it profits from minimal price movement in the underlying asset.

## Put Ratio Backspread

The Put Ratio Backspread strategy involves selling and buying put options in a specific ratio.

## Bear Call Spread

A Bear Call Spread is an options trading strategy that's used when a trader believes the price of an underlying asset will go down, but not significantly.

## Bear Put Spread

A Bear Put Spread is a type of vertical spread strategy used in options trading.

## Long Put

Long Put option is the most basic & simplest strategy. It is recommended or implemented when we expect the underlying asset to show significant downside move.

## Short Call

Short Call strategy is employed in a bearish or neutral market outlook, where the underlying asset's price is expected to remain stable or fall.

## Call Ratio Backspread

The Call Ratio Backspread strategy involves selling and buying call options in a specific ratio.

## Bull Put Spread

A Bull Put Spread is a type of vertical spread strategy used in options trading

## Bull Call Spread

A Bull Call Spread is an options trading strategy that's used when a trader believes the price of an underlying asset will go up, but not significantly.

## Short Put

Short Put strategy is employed in a bullish or neutral market outlook, where the investor believes that the underlying asset's price will remain stable or rise.

## Long Call

Long Call option' is the most basic & simplest strategy. It is recommended or implemented when we expect the underlying asset to show significant upside move.