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As part of a newsletter subscription service, I purchased the following at their recommendation:

4 contracts of USB May 21, 2021 $52.50 Puts at price of $1.33

1 contract of HD May 21, 2021 $295 Puts at price of $2.25

What is my potential maximum loss?

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What is my potential maximum loss?

All the money that paid for the options. If the stock doesn't fall below the put prices, the options will just expire (and are worthless). Assuming that a contract is 100 shares, that would be a total of $757 .

Sorry if I'm overstepping here: if you have to ask this type of question you probably should not trade in options, regardless of what any newsletter says.

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  • No. You were kind enough. At least she didn't sell a naked call only to have you tell her the loss was unlimited. Losing a bet is very Vegas. – JTP - Apologise to Monica♦ Apr 7 at 0:29
  • If you have to ask this type of question you probably should not trade in options, regardless of what any newsletter says. True that. By traditional definition, the risk with long options is the premium paid, regardless of whether it's a standard 100 share contract or an adjusted one. Unfortunately, the OCC auto exercises ITM options at expiration and that means that a long option position can turn into a long (or short) position in the underlying with significant directional risk on the next business day. – Bob Baerker Apr 7 at 14:18

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