Buy To Open Put Example May 2026

The contract is now worth $1,500. After subtracting your initial $200 investment, your profit is $1,300 . 2. The Hedge (Stock Stagnates) The stock stays flat at $100 .

Two weeks later, Company XYZ misses earnings and the stock price plunges to . buy to open put example

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. The contract is now worth $1,500