Put option
An option giving the right to sell an instrument at the strike before expiry. The buyer pays a premium; profit grows as the market falls below it.
Definition
A put option gives the right (not the obligation) to sell the underlying instrument at the strike price before expiry, in exchange for the premium paid. A long put profits when the price of the underlying falls far enough to cover the cost of the premium; a short put has the opposite risk profile.
Example
A stock trades at 100 USD; you buy a put with a 95 strike for a 2 USD premium. If it settles at 90 at expiry, the put has 5 USD of intrinsic value — a profit before costs of about 3 USD per unit. If the stock stays at 100, you lose the premium.
Anti-example / common mistake
A put is not an automatic profit “because a crash is coming” — timing, IV and theta can eat the position. Also, do not confuse a long put with a 1:1 short stock position without accounting for the premium and delta.