Put option trading

[Guest Chuong]

I'm learning to trade option recently and in my demo account I made a trade with the Australia 200 4750 PUT JUN-20 opening at 406 and it is currently down to 260. So I cannot understand why my P/L is -AU$1434 currently when I'm buying a Put option? Should I be making money if this trade is going down in value?Could someone help me understand this put option trading?

Thank you!

 

[andysinclair]

The value of the put option has declined from 406 to 260, therefore your P&L has also declined (as you bought the option).

I suggest you find some articles/videos online that explain how options work, or even better buy yourself a book, I have "Options Plain and Simple" by Lenny Jordan which I recommend.

[Bopperz]

Hi Chuong,

As the Aus 200 increases, the value of your put decreases. You should seriously think about staying away from options until you have researched how they work.