Put option

A put protects the value received from selling an underlying asset if its price falls. At expiry, a simple put's intrinsic payoff is max(exercise price − underlying price, 0). The holder's profit also includes the premium and other costs. A put can be used as a hedge or as a speculative position, depending on whether it offsets an existing exposure. With interest-rate futures, where prices often move inversely to rates, a put on the futures can protect a borrower against rising rates; identify the underlying before reasoning about direction.