What Is a Put Option? Explained Clearly

If you’re learning about options for the first time, you might have heard the term “put option” — and wondered what it actually means.
Here’s the simple version:

A put option gives you the right (but not the obligation) to sell a stock at a certain price before the option expires.

In this short Yiddish lesson — and in the full video below — we’ll walk through:

• What a put option is
• How it works step-by-step
• Why traders use puts for both protection and profit

🎥 Watch the full Yiddish video below for examples and visual explanations.

🧠 What Exactly Is a Put Option?

Think of a put option as a contract that gains value when stock prices fall.

When you buy a put option, you’re essentially reserving the right to sell a stock at a locked-in price (called the strike price).

Here’s how it works:

• If the stock price drops below your strike price, the put option becomes more valuable.
• You can sell your put for a profit, or exercise it to sell shares at the higher strike price.
• If the stock price stays above the strike price, the put expires worthless, and you only lose the premium you paid.

👉 In short:

• Calls make money when prices go up 📈
• Puts make money when prices go down 📉

Now that you understand how puts work, it’s time to see them in action.
Watch the Yiddish video above for a clear explanation with real-world examples and visual breakdowns.

And if you’re learning options step-by-step, check out the other videos in this Yiddish series:

What Is a Call Option? Explained Simply (Yiddish)

What Does It Mean to Be Short a Stock? (Yiddish)

What Is a Short Call — and Why It’s So Risky (Yiddish)