For an investor to yield a profit, the price of the security has to decrease before its exercise date. Buying a put option grants the rights to sell the security at a fixed price within the exercise date. When there is indeed a fall in the value of a security, the investor should have bought it at the strike price and immediately sold it off at a lower market price and also may wait a little longer to discern the possibility of a further price fall.

A Put option is not bought if the price of security fails to fall below the striking price. In such a situation, the investor will only suffer a loss of premium.

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