A customer would buy put contracts because the customer:
is bearish on the underlying security
A customer would buy put contracts if they believe that the price of the underlying asset is going to decrease in the future. By buying a put contract, the customer has the right, but not the obligation, to sell the underlying asset at a predetermined price (known as the strike price) before the expiration date. If the price of the underlying asset decreases below the strike price, the customer would profit by selling the asset at the higher strike price, despite the market price being lower. If, however, the price of the asset increases or remains the same, the customer could let the option expire, losing only the premium paid for the option. By buying put contracts, customers can protect themselves from downside risk, hedge against losses, or speculate on a price decrease in the underlying asset.
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