The put purchase is a contract by means of which the buyer acquires the right to sell an asset at a fixed price.
If your company has an investment portfolio, by means of a put it can consolidate the profits obtained and at the same time maintain the upward potential of the same, in exchange for the payment of a premium.
At maturity you receive:
- If the price of the portfolio at maturity > strike price: nothing.
- If the price of the portfolio at maturity < strike price: the difference between the two prices
The effect of the settlements of the put for the client consists in neutralising the fall in the portfolio below an established level (strike price). If the portfolio revalues, the put does not generate settlements, and the client receives the whole capital gain of the portfolio.
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