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Put Option

Derivative contract granting the holder the right, but not the obligation, to sell an asset at a specified price.

A put option grants the holder the right to sell an underlying asset at a specified strike price before or on expiration.

In oil trading, put options hedge against price declines or speculate on falling crude or product prices. They allow risk transfer without immediate physical sale.

Pricing depends on volatility, time to expiry, and underlying price levels. Traders manage premium costs relative to potential protection.

Put options complement risk management and portfolio strategy in volatile markets.