The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we are going to briefly describe the differences between a short put option and a long put option. This gets back to some of the options basics that I think are really important foundational elements that you have to understand if you want to start trading options or trading for a living. Let's talk about a long put option actually first. Long options are some of the first option strategies that you learn because they're very easy for most people to understand conceptually. With a long put option, you are doing two things. One, you are paying money to enter the position and two, in exchange for paying money to enter the position at a particular strike price, you have complete upside potential in the sense that if the stock continues to move down, you could make a lot of money on that contract. Long put options profit from a quick and rapid decline in the underlying stock price or a rise in volatility. What would