> For the complete documentation index, see [llms.txt](https://docs.earn.polynomial.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.earn.polynomial.fi/fundamental/options-primer/put-options.md). # Put Options Put options give holders of the option the right, but not the obligation, to sell a specified amount of tokens at a strike price within a specified option expiry time. **Let's understand put options with an example:** Assume you bought a brand new Audi. You are really enjoying your new car, driving it daily. But people constantly nags you to get insurance since it was not a small purchase. And just to shut them down, you bought insurance. Unlikely event occurred and you met with an accident. Fortunately, nothing happened to you but the car got a lot of damage. Luckily you bought the insurance, so you got nothing to worry about since the insurance company will repair your car for no extra cost. Buying insurance is exactly like buying a put option. You are holding a large chunk of an asset and you wanted to protect your asset from an unlikely event(Market crash). So what you do is, you purchase a put option by paying premium(insurance in above example) to the option seller. So in case an unlikely event(market crash) happens, you have nothing to worry about. #### Put Options are bets that the price of an asset is going to fall. Here is a typical situation where buying a put option can be beneficial: Say, for example, that you bought ABC at $105, but you start getting concerned, because the asset price is starting to drift down because the market is weakening. So you decided to purchase a put option with expiry(lets say June 30th) and strike price of $100 for a premium of $8 . By buying the put, you’re locking in the value of your asset at $100 per share until the expiration date. Now even if the price of the asset drops to $80, you can still sell your asset for $100 dollars to the option seller. **So in effect, the put option gives you the right to sell the asset at $100 no matter how low the price falls.** --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.earn.polynomial.fi/fundamental/options-primer/put-options.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.