what are PUTS in stock market

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    A put in the stock market, also known as a put option, is a legal contract allowing the holder to sell a certain amount of a certain stock, at a certain price, within a certain amount of time. The put option does not mandate the holder to sell the stock; the put merely gives the holder the option (hence the name) to sell if he chooses.

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    In finance, a put or put option is a stock market device which gives the owner the right, but not the obligation, to sell an asset (the underlying), at a specified price (the strike), by a predetermined date (the expiry or maturity) to a given party (the buyer of the put). Put options are most commonly used in the stock market to protect against the decline of the price of a stock below a specified price. If the price of the stock declines below the specified price of the put option, the owner of the put has the right, but not the obligation, to sell the asset at the specified price, while the buyer of the put, has the obligation to purchase the asset at the strike price if the seller uses the right to do so (the seller is said to exercise the put or put option). In this way the seller of the put will receive at least the strike price specified even if the asset is worth less.

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