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A long put option gives the holder the right to sell a stock at a specified price. The profit potential of a long put option increases as the stock price decreases below the strike price. The loss potential is limited to the premium paid for the option. Here is a graph that shows the profit and loss potential of a long put option:

Graph showing the x-axis as stock price and the y-axis as profit/loss. The graph shows a downward sloping line representing potential profit as stock price decreases below the strike price, and a horizontal line representing the maximum loss equal to the premium paid for the option.

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4mo ago

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Incorporating option exercise into your investment strategy can provide benefits such as potential for higher returns, risk management through hedging, and flexibility in adjusting your positions based on market conditions.


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