Buying Puts, a Bet on a Fall with the Loss Fixed

After this lesson you can

• Work out a put's breakeven, worst case and best case
• Compare a put with a short sale: the fall it needs, and the loss it caps
• Choose the strike and the expiration from how far and how fast you expect the stock to fall
• Explain why implied volatility tends to rise when stocks fall, and what that means if you buy after the fear shows up
• Manage a put that's working, and avoid the five mistakes