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You wrote, when you buy a protective put on a stock it gives you the right to sell
that stock at the strike price you buy. if you decide to keep the stock do you just sell to close, and do you receive the premium of the bid price?


In addition, it's not really necessary for you to exercise the put. You might prefer to sell the contract instead. If the stock price plummeted, the put's intrinsic value should have gone up a corresponding amount. In fact, if the stock just plummeted, the implied volatility will likely have gone up as well...

- Joel
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