InvestorQ : Is buying a put option quite like short selling the stock?
Arti Chavan made post

Is buying a put option quite like short selling the stock?

Answer
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2 years ago


Technically, you are absolutely correct. The work in the same way and make profits when the price goes down. But when you short sell, you cannot sell for more than a day and if it goes into auctions then the losses can be totally huge. Also you can use put options as a low risk strategy to play the market downsides. The debate of short selling versus put options is as old as the hills. There is no difference between short selling and put options buying as they both involve a negative view on a stock or the index. IT is the context that differs in both the cases.