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Buying put options not what I expected


Guest Chuong

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Guest Chuong

Hello fellow IG investors, I recently bought some put options un my demo account to learn how to trade options. I set my strike price accordingly and after a few days the price of the stock dropped. Assuming that I would be making money on this put option if the price is below the strike price however the p/l is still showing negative amount on this trade.  Am I understanding how put options works or is this some sort of error? 

Thank you.  

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Its not the premium, as you dont actually pay/receive premium on a spreadbet. But the bid/offer can be quite wide, check the buy price now vs the price your paid.

Factors that will impact your option price, other than price.

Vol: If implied vol drops, you will lose PnL

Time: The value of your option will decrease each day, this is most potent near expiry.

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