What is Put Option?

A put option contract (the opposite of a call option) is a specialized contract that is sometimes used in derivatives trading. It gives an investor the right, but not the obligation, to sell an underlying security (or cryptocurrency, or other type of asset) at a specified price within a defined time period. When the option contract expires, the investor can choose to sell the underlying security or let the option contract's value depreciate to zero. Put options can sometimes be used in combination with call options to form unique trading strategies.