We have already established in another video in this library that buying an option is much like buying insurance. In the case of puts, it is like taking out a policy on the price of a commodity that you later intend to sell. The question of why you would use a put can be answered by considering that very intention.
If, as a producer of corn, I have 100,000 bushels of expected production in the coming growing season, but I have yet to even plant the crop, I may be unwilling to forward sell all of that production, even if prices are good. In the very moment of making that decision, I have made room for the possibility of having to later sell that corn at a lower price. In other words, I as a producer, I have risk.
Buying puts allows producers to manage that risk up until the actual sale is made. In a world of extreme volatility, the put acts as insurance against bad prices, while still allowing for the possibility of higher prices.
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