A Put Option represents a type of financial derivative contract that gives its holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price, known as the strike price, within a defined time frame or upon its expiration. This is contrasted with a call option, which grants the right to buy instead of sell. Put options are typically used for hedging purposes or as a speculative investment. For example, if an investor owns stock but fears a decline in its price, they can purchase a put option to lock in a sale price, minimizing their potential loss. Put options can also be utilized by traders anticipating a decline in the value of an asset, allowing them to profit from its reduced price. When the market price of the underlying asset is below the strike price of a put option, it is termed 'in the money', making it beneficial for the holder of the option to exercise it. In contrast, it is considered 'out of the money' when the market price exceeds the strike price, in which case the holder wouldn't typically exercise the option as it would lead to a loss. Trading in put options involves an assessment of market trends, volatility, and risk considerations.