Ever worried about losing money on investments?

Islamic banking and finance

Ever worried about losing money on investments?

Imagine you've invested in a tech stock, hoping for big returns, but suddenly the market crashes. You could lose a lot of money.

A put option lets you set a price at which you can sell your tech stock, protecting you from losses if the stock price drops.

Example

You buy a put option for 50 per share, and if the stock falls to 40, you can still sell it at $50.

Remember this

A put option is like insurance for your investment, ensuring you don't lose more than the option's cost if the stock price falls.

Text adapted from Wikipedia, licensed under CC BY-SA 4.0.

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Educational content, not financial advice.

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