What's the difference between a put option and a limit order?

Question

What's the difference between a put option and a limit order?

Answer 1

Ummm. . . . Everything?

Try investopedia

Answer 2

Apples and eggs..... Two different things.

Put Option: the right to sell stock at a specific price... by a specific date.

Limit order:  "Limit" the amount you'll pay for a purchase or "limit" the amount you'll take on a sale.

Answer 3

A put option is a derivative security.  It gives the holder to sell security x @ price y at a specific date.

A limit order is a type of transaction instruction.  Buy or sell security A at price B.  There are different types of limit orders.

Answer 4

A limit order is an instruction you give a brokerage to buy (sell) something at a given price or less (more).

For example, I could tell my broker to buy 100 shares of XYZ for $20.00 per share or less. The broker would then buy 100 shares of XYZ if he could find someone willing to sell it for $20.00 per share or less.

Limit orders can also be used to sell. I could tell my broker to sell 100 shares of XYZ for $25.00 per share or more. The broker would then sell 100 shares of XYZ if he could find someone willing to buy it for $25.00 per share or more

A put option is a contract. The contract gives the buyer (holder) of the contract the right, but not the obligation, to sell something (the underlying) for a given price (the strike price) prior to the contract expiration. The seller (writer) of the contract, in return for a premium paid by the buyer to the seller, accepts the obligation to buy the underlying for strike price if the holder decides to sell.

To learn more about what a put option is I suggest you take the free "options overview" tutorial at

http://www.cboe.com/LearnCenter/Tutorial...