Super noob question. If someone sells puts for a stock, they sell the option to buy 100 shares at the strike price. How can the put buyer sell as soon the current price dips below the strike price before the expiration date?
This seems like it poses little benefit to the put seller.
If I sell puts for Apple at strike price of $160 for expiration date of June 1, yes the price might dip below $160 during now and then but it could climb back over that by expiration date. So why does the put seller have to buy those shares if price drops below strike price before expiration date if the put buyer decides to exercise it? That is significant risk that makes no sense to me.
Why as a put contract buyer do you not have to get the expiration date right?
[link] [comments] https://www.reddit.com/r/stocks/comments/138649k/how_is_it_possible_we_can_exercise_put_contracts/
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