: Substantial; you could be forced to buy a stock that has fallen significantly. Combining Them: The Put Spread
A "Put Spread" involves simultaneously buying and selling puts on the same stock with the same expiration date but different strike prices. This is a "risk-defined" trade. Put Option Explained - TD Bank sell a put and buy a put
: This is a neutral-to-bullish strategy. You receive a premium in exchange for the obligation to buy the stock at the strike price if it falls below that level. : Substantial; you could be forced to buy
: Generate income from the premium or acquire stock at a discount. sell a put and buy a put