Put Options
An investor buys a put option. This investor has:
The buyer of a put option has the right to sell the underlying stock at the strike price. Put buyers are bearish - they profit when the stock price falls below the strike price. The put seller has the obligation to buy i
Complete Analysis & Legal Rationale
The buyer of a put option has the right to sell the underlying stock at the strike price. Put buyers are bearish - they profit when the stock price falls below the strike price. The put seller has the obligation to buy if the option is exercised.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Governs options accounts, approvals, and related supervisory requirements (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.