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Put option trading


chuongy

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Hello IG freinds,

I'm learning to trade put options through my demo account. Currently I bought some PUT options  for US 500 2440 PUT APR-20 open at 123.48 and it is currently down at 95 points. Currently my p/l is at -$290 which I don't understand because I though you would be making money if the market is going down when you buy put options? Can someone tell me why is this so?

Thanks!

 

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3 points i think :-

1. the underlying needs to fall by more than the cost of the option

2. there is also the spread

3. volatility changes can affect the option price ....but if the underlying has dropped more than the cost of the option at expiration , you should have a profit

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