InterDigital Inc (IDCC)

[The Count]

Put options

One does not have to own the shares to buy a put option. If you buy a put and don't own the shares, you will sell the put when you want to close your position. No need to buy shares and exercise the put.

I strongly suggest caution before moving into options. They are high risk investments, and most buyers of put and call options lose money, often the entire contract price. This doesn't mean that they are never appropriate to use, but one should have a good understanding of how they work. Generally they are speculative investments, looking for a big return, which is very high risk and has a low probability of success. If they are used as a hedge, then the potential loss on the option can be offset by good performance of the stock, and poor stock performance is offset by income from the option, reducing overall risk and overall expected return.