A call was the right to buy — it paid when the stock rose. A put is its mirror: the right to sell, and it pays when the stock drops. Same idea, flipped.
You'll buy one with play money and watch what a fall does to it.
No advice — just a simulation.
Your cash
$20,000
This trade
—
Meet a put
Same stock, XYZ at $100 — but this time you think it might fall. A put is the option that profits from a drop. Here's one you can buy.
XYZ
a normal stock · $100.00
$300
the price of this put
It gives you the right to sell 100 sharesa right, not an obligation — you never have to use it
…at a locked price of $95this locked price is called the strike
strike
…any time in the next 30 daysthe deadline is called expiration
expiration
It costs you $300 today, no matter what happens nextthis up-front price is called the premium
premium
If XYZ crashes, the right to sell at $95 becomes valuable — you could sell high while everyone else is stuck low. This costs just $300.
In plain words
You're paying $300 for a coupon: “I can sell 100 XYZ at $95 until the deadline — if I want to.” A call is the right to buy; a put is the right to sell. That's the only difference.
You're about to buy1 × XYZ $95 put
Expiresin 30 days
Cost (premium)$300
Done. You hold a put now. 🎟️
$300 left your cash. In return you own one put — the right to sell 100 XYZ at $95 until the deadline.
📋 What you own
Your option1 × XYZ $95 put
It lets you sell100 shares @ $95
You paid$300
Deadline30 days
The one catch to remember
You're never obligated to use it. The most you can ever lose is the $300 you paid — not a cent more. (Just like a call — capped cost.)
From here, two things can happen
You can sell the put any time before the deadline — or hold it to the deadline and let it settle. Let's feel both.
Day 10: it has a live price
You're 10 days in, 20 left. Your put trades on the market all day, and its price moves opposite the stock — it gains when XYZ drops. Tap to see.
XYZ
your stock
$100.00
unchanged
📋 Your option1 × XYZ $95 put · 20 days left
Your put is now worth about
$175
It's worth less than the $300 you paid — even though XYZ hasn't moved.
Worth less — and the stock didn't even move?
Right. 10 days quietly leaked away. Options — calls and puts both — get cheaper as the deadline nears, even if the stock sits perfectly still. That slow leak is called time decay: the clock is always running against the buyer.
Can I just sell it now?
Yes — any time before the deadline. Tap a move above first, then come back: selling closes your contract — a buyer pays you its current price in cash, and you're done. You never touched any shares; you just traded the right itself.
Expiration day · 30 min to the close
Decision time. Drag to set where XYZ ends up today — then choose what to do with your put before it expires.
XYZ
your stock · closing soon
$100.00
unchanged
Set where XYZ closes$100
$70strike $95$120
📋 Your position
1 × XYZ $95 putright to sell 100 @ $95
What it's worth right now$0
You paid$300
It's about to expire. Two choices:
That's a put, start to finish.
The mirror of a call: it pays when the stock falls. Now drag the ending price yourself — and find where the profit caps out.
Drag: where XYZ ends up$80
← $0strike $95$120
Your profit if XYZ ends here
+$1,200
Below your $95 strike and climbing as XYZ falls — every $1 down adds $100.
The standard way every trader draws an option — payoff at expiration. Two axes:
→Across: the stock's price when the option expires — low on the left, high on the right.
↑Up: your profit or loss in dollars at that price.
The line crosses zero at the breakeven: above it you're in profit, below it you're in the red. A flat stretch means your result has stopped changing; a sloped stretch means every $1 the stock moves changes your P/L by $100 (you control 100 shares).
Learn more — how to read option charts →
A small, known cost — and an upside that grows as the stock falls
Same lopsided shape as a call, just flipped left-to-right: a flat floor on the right, a line that keeps rising as XYZ drops on the left. No matter how high XYZ goes, you can't lose more than the $300 you paid. The further it falls below $95, the more your put is worth.
Two ways out, same as a call:sell the contract before the deadline for cash, or hold it to expiration — if it's in the money it settles into cash (you sell 100 shares at $95), and if it isn't, it expires worthless.
It isn't free money. If XYZ stays at or above $95, your put expires worthless and the $300 is gone — you were paying for a drop that never came. A put only pays if the fall actually happens.
Quietly powerful: a put is also insurance on a stock you already own — a floor under it, no matter how far it crashes. That's a whole lesson of its own, coming later.
Call
right to BUY — pays when it rises
Put
right to SELL — pays when it falls
Both
capped cost, open upside
Next up
You've now met both building blocks — call and put. Next we line up all the shapes side by side, and meet the people on the other side of these trades. That's where it gets dangerous.