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Strategies & Market Trends : The Stock Market Bubble
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To: Kip518 who wrote (2569)1/18/1999 1:34:00 PM
From: Tommaso  Read Replies (1) of 3339
 
"A put is only a contract to buy."

Well, actually the owner of the put has a contract to sell, and if the stock is selling at a lower price can oblige the seller of the put to buy. Also, once an option expires unexercised it is worthless.

But, as you say, the whole system has not really been tested in a severe and protracted decline, and exhanges sometimes change rules and get away with it.
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