To The Moon

Ever look at a stock and think: “That valuation is way too high”? If you want to profit on the downside, you could short-sell—or you could try the Long Put strategy.

📒 The Options Handbook breaks down the key points of using a Long Put for shorting—

▶ What Is Using a Long Put to Go Short? 🤔

A Long Put means you pay a premium to gain the right to sell the stock at a set price in the future.

If you don’t own the shares, a Long Put is simply betting on the stock’s drop by profiting from the rising value of the put—not by actually selling shares.

▶ Both Are Bearish—So What’s the Difference? ⚖️

1. Profit mechanics

• Long Put: Gains when the put option increases in value as the stock falls—no borrowing or owning stock needed.

• Short selling: Borrow shares, sell high, buy back lower—profit from price difference.

2. Risk limits

• Long Put: Loss is limited to the premium paid—suitable for risk-conscious investors.

• Short selling: Loss is unlimited—if the stock surges, you may be forced to cover at huge cost.

3. Costs

• Long Put: No borrowing fees—just the option premium.

• Short selling: Requires paying borrow fees.

4. Time factor

• Long Put: Suffers from time decay; needs the stock to drop quickly.

• Short selling: No set expiration—better for slow declines, though subject to recall risk.

🎁 The Options Handbook features many more beginner-friendly and advanced strategies—now available in the Tiger Coin Center! 🐯

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