You can lose up to 100% of premium (which makes up 100% of your investment in that option) if you BOUGHT the put option. You can lose up to Strike Price minus the premium received if you SOLD the put option.
Not with options. If you want to bet against a company you with options you can do it by either:
1. Buy a put. The put gives you the right to sell the stock at a certain price. If it goes below that price you make a profit, if it doesn’t your put is worthless. The maximum you can lose is what you paid for the put.
2. Sell a Call. This gives someone the right to buy the stock at a certain price (and you promise to sell at that price). If the stock is below that price your profit is what you sold the call. Your maximum loss is infinite since a stock price has no (theoretical) limit.
> > doesn't betting against a stock have infinite loses?
> Not with options.
you maybe meant to say "not when you buy options":
> 2. Sell a Call. This gives someone the right to buy the stock at a certain price (and you promise to sell at that price). If the stock is below that price your profit is what you sold the call. Your maximum loss is infinite since a stock price has no (theoretical) limit.
> I know next nothing about option trading, but doesn't betting against a stock have infinite loses?
the entire point of everything under discussion here is that "betting against a stock" can take multiple forms. if you'd like to pick one, google, or your interlocuters, could tell you what the maximum possible risk is.
keeping your money in cash is a form of betting against a whole lot of stocks simultaneously.
