what is a stock put or an putt in reference to stock?

Answer 1

Put Options are options to sell a stock at a specific price on or before a certain date. In this way, Put options are like insurance policies
If you buy a new car, and then buy auto insurance on the car, you pay a premium and are, hence, protected if the asset is damaged in an accident. If this happens, you can use your policy to regain the insured value of the car. In this way, the put option gains in value as the value of the underlying instrument decreases.

If all goes well and the insurance is not needed, the insurance company keeps your premium in return for taking on the risk.

With a Put Option, you can "insure" a stock by fixing a selling price.
If something happens which causes the stock price to fall, and thus, "damages" your asset, you can exercise your option and sell it at its "insured" price level.

If the price of your stock goes up, and there is no "damage," then you do not need to use the insurance, and, once again, your only cost is the premium.

This is the primary function of listed options, to allow investors ways to manage risk.

To learn more about options (calls and puts) you can take the short tutorials at

http://www.cboe.com/LearnCenter/Tutorials.aspx

Answer 2

Some companies who sell their stock also offer the ability to trade options on those stocks. This is know as leverage. Leverage will give the trained investor the ability to make money in any market condition. Whether the market is moving up, down or sideways options give you that leverage.

There are two types of market strategies, bearish and bullish. The bearish investor is pessimistic in regards to the market and believes the stock will go down, hence he will play a PUT on that stock or industry. PUTs are used as income generating strategies or to insure against loss. The bullish investor is optimistic in regards to the market so he/she will play a CALL option to generate a greater percentage gain than he would make simply owning the stock. Playing options is riskier but offers greater gains. You do not need to own the stock to play options but in some cases the risk is greater.

To remember a CALL option from a PUT option just keep this in mind, when you CALL someone you pick up the phone, when your done you PUT down the phone. PUTs are for down trends and CALLs are for up trends.

Hope this helps and was not TMI.

Answer 3

a put is a type of investment called an option. there are puts and pulls. if i remember correctly, a put is when a stock is going up. Its kinda like betting on the stock market. There are a lot of details, but essentially, you get the right to sell a stock by a certain date. If you buy the put when the stock is at 33 dollars for example, and the end date is 3 weeks later. If the stock market goes up to 36 dollars, you can sell it back o the option writer and gain a profit of 3 dollars. If it goes down, you have to sell it on the end date, and you take a loss in profits.