should i buy in the money itm or out of the money otm puts 
it really depends on factors such as your trading objective risk appetite amount of capital etc the dollar outlay for in the money itm puts is higher than for out of the money otm puts because they give you the right to sell the underlying security at a higher price but the lower price for otm puts is offset by the fact that they also have a lower probability of being profitable by expiration if you don t want to spend too much for protective puts and are willing to accept the risk of a modest decline in your portfolio then otm puts might be the way to go can i lose the entire amount of the premium paid for my put option yes you can lose the entire amount of premium paid for your put if the price of the underlying security does not trade below the strike price by option expiry i m new to options and have limited capital should i consider writing puts put writing is an advanced option strategy meant for experienced traders and investors strategies such as writing cash secured puts also need a significant amount of capital if you re new to options and have limited capital put writing would be a risky endeavor and not a recommended one the bottom lineput options allow the holder to sell a security at a guaranteed price even if the market price for that security has fallen lower that makes them useful for hedging strategies as well as for speculative traders along with call options puts are among the most basic derivative contracts 