Definition
A long put is the purchase of a put option — a contract granting the right, but not the obligation, to sell the underlying asset at the strike price before expiration. The buyer pays a premium for this right.
It is a fundamentally bearish or defensive position. A long put gains value as the underlying falls and is the simplest way to take a directional bet on a decline or to protect an existing holding from one.
Why it matters
How it works
The buyer of a put pays a premium upfront. If the underlying falls below the strike by more than the premium cost, the position is profitable; the put can be sold for a gain or exercised to sell shares at the favorable strike price. If the underlying instead rises or stays flat, the put loses value and may expire worthless — but the loss can never exceed the premium.
This capped, known cost is what distinguishes a long put from short selling. A short seller faces theoretically unlimited loss if the asset rises; a put buyer simply forfeits the premium. The trade-off is that the underlying must move enough to overcome both the strike distance and the premium before the position turns profitable.