Can I buy put options on an ADR?
Some ADRs have standardized options that trade on US exchanges.  If your stock/ADR is one of those, then you find the put option through most brokerages that deal with stock options and trade the option like you would on a regular stock.  If your ADR does not have standardized options, then your options will depend on where the ADR trades.  If it's OTC, you might not even be able to short it.  If it trades on a major exchange, the shorting the ADR may be a viable choice.
In the scenario you describe, and really, in any scenario, by the nature of how option contracts work: a higher strike put will necessarily be more expensive than the lower strike put (everything else being equal). the lower strike call will necessarily be more expensive than the higher strike call (everything else being equal). In put options, the buyer has the right to sell stock for the strike price. So the higher the strike price, the more money the buyer of the put option can make by selling the shares of stock at a higher price. In call options, it's the exact opposite: buyers of the call option have the right to buy stock at the strike price. The lower the strike price, the better for the buyer: they have the right to buy stock for a lower amount of money. So it must be worth more. "Put Options for Kids: You have a big box of candy bars. You saved up your allowance to get a lot of them, so you could have one whenever you want one. But, you just saw a commercial on TV for a new toy coming out in one month. Your allowance alone won't buy it, and you want that toy more than you want the candy. So, you decide that you'll sell the candy to your friends at school to buy the toy. Now, you have a choice. You can sell the candy now, and put the money in your piggy bank to buy the toy later. Or, you can save the candy, and sell it in a month when you actually need the money to buy the toy. You know that if you sell all the candy you have today, you can get 50 cents a bar. That's not quite enough to buy the toy, but your allowance will cover the rest.  What you don't know is how much you might be able to sell the candy for in a month. You might be able to get 75 cents a bar. If you did, you could pay for the toy with just the money from the candy and even have some left over. But, you might only be able to sell them for 25 cents each, and you wouldn't have enough to buy the toy even with your allowance. You'd like to wait and see if you could get 75 cents each, but you don't want to risk getting only 25 cents each. So, you go to your father. He and his co-workers like these candy bars too, so he'd be willing to buy them all and sell them to his friends the way you're planning to do with yours. You ask for the option to sell him all the candy bars for 50 cents each in one month. If you find out you can get more for them at school, you want to be able to take that deal, but if you can't sell them for 50 cents at school, you'll sell them to your dad. Now, your dad knows that he could have the same problem selling the candy at 50 cents or more that you are afraid of. So, he offers a compromise. If you pay him $5 now, he'll agree to the deal. You figure that even without that $5, between your allowance and the candy money, you can still buy the toy. So, you take the deal.  In one month, you can offer the candy at school. If nobody will pay 50 cents, you can sell the candy to your dad when you get home, but if the kids at school will pay 50 cents or more, you can sell it all at school. Either way, you have enough money to buy the toy, and you can also choose which price to accept, but you had to pay your dad $5, and you can't get that back, so if it turns out that you can sell the candy at school for 50 cents, same as today, then because you paid the $5 you don't end up with as much as if you'd simply waited. In the financial market, this type of option is a ""put option"". Someone who owns something that's traded on the market, like a stock, can arrange to sell that stock to someone else at an agreed-on price, and the seller can additionally pay some money to the buyer up front for the option to not sell at that price. Now, if the stock market goes up, the seller lets the contract expire and sells his stock on the open market. If it goes down, he can exercise the option, and sell at the agreed-upon price to the buyer. If, however, the stock stays about the same, whether he chooses to sell or not, the money the seller paid for the option means he ends up with less than he would have if he hadn't bought the option. Call Options for Kids: Let's say that you see another ad on TV for another toy that you like, that was just released. You check the suggested retail price on the company's web site, and you see that if you save your allowance for the next month, you can buy it. But, in school the next day, everybody's talking about this toy, saying how they want one. Some already have enough money, others are saving up and will be able to get it before you can. You're afraid that because everyone else wants one, it'll drive up the price for them at the local store, so that your month's allowance will no longer buy the toy. So, you go to your dad again. You want to be able to use your allowance money for the next month to buy the new toy. You're willing to wait until you actually have the money saved up before you get the toy, but you need that toy in a month. So, you want your dad to buy one for you, and hold it until you can save up to buy it from him. But, you still want it both ways; if the price goes down in a month because the toy's not so new anymore and people don't want it, you don't want to spend your entire month's allowance buying the one from your dad; you just want to go to the store and buy one at the lower price. You'll pay him $5 for the trouble, right now, whether you buy the toy he got you or not. Your dad doesn't want to have a toy he's not using sitting around for a month, especially if you might not end up buying it from him, so he offers a different deal; In one month, if you still want it, he'll stop by the store on his way home and pick up the toy. You'll then reimburse him from the allowance you saved up; if it ends up costing less than a month's allowance, so be it, but if it costs more than that, you won't have to pay any more. This will only cost you $3, because it's easier for him. But, because he's not buying it now, there is a small chance that the item will be out of stock when he goes to buy it, and you'll have to wait until it's back in stock. You agree, on the condition that if you have to wait longer than a month for your toy, because he couldn't get one to sell you, he pays you back your $3 and knocks another $5 off the cost to buy the toy from him. The basic deal to buy something at an agreed price, with the option not to do so, is known as a ""call option"". Someone who wishes to buy some stocks, bonds or commodities at a future date can arrange a deal with someone who has what they want to buy them at a specific price. The buyer can then pay the seller for the option to not buy. The counter-offer Dad made, where he will buy the toy from the store at whatever price he can find it, then sell it to you for the agreed price, is known as a ""naked call"" in finance. It simply means that the seller, who is in this case offering the option to the buyer, doesn't actually have what they are agreeing to sell at the future date, and would have to buy it on the open market in order to turn around and sell it. This is typically done when the seller is confident that the price will go down, or won't go up by much, between now and the date of the contract. In those cases, either the buyer won't exercise the option and will just buy what they want on the open market, or they'll exercise the option, but the difference between what the seller is paying to buy the commodity on the market and what he's getting by selling it on contract is within the price he received for the option itself. If, however, the price of an item skyrockets, the seller now has to take a significant, real loss of money by buying something and then selling it for far less than he paid. If the item flat-out isn't available, the buyer is usually entitled to penalties for the seller's failure to deliver. If this is all understood by both parties, it can be thought of as a form of insurance." 1) Yes, both of your scenarios would lead to earning $10 on the transaction, at the strike date. If you purchased both of them (call it Scenario 3), you would make $20. 2) As to why this transaction may not be possible, consider the following: The Call and Put pricing you describe may not be available. What you have actually created is called 'arbitrage' - 2 identical assets can be bought and sold at different prices, leading to a zero-risk gain for the investor. In the real marketplace, if an option to buy asset X in January cost $90, would an option to sell asset X in January provide $110?  Without adding additional complexity about the features of asset x or the features of the options, buying a Call option is the same as selling a Put option [well, when selling a Put option you don't have the ability to choose whether the option is exercised, meaning buying options has value that selling options does not, but ignore that for a moment]. That means that you have arranged a marketplace where you would buy a Call option for only $90, but the seller of that same option would somehow receive $110.  For added clarity, consider the following: What if, in your example, the future price ended up being $200? Then, you could exercise your call option, buying a share for $90, selling it for $200, making $110 profit. You would not exercise your put option, making your total profit $110. Now consider: What if, in your example, the future price ended up being $10? You would buy for $10, exercise your put option and sell for $110, making a profit of $100. You would not exercise your call option, making your total profit $100. This highlights that if your initial assumptions existed, you would earn money (at least $20, and at most, unlimited based on a skyrocketing price compared to your $90 put option) regardless of the future price. Therefore such a scenario would not exist in the initial pricing of the options. Now perhaps there is an initial fee involved with the options, where the buyer or seller pays extra money up-front, regardless of the future price. That is a different scenario, and gets into the actual nature of options, where investors will arrange multiple simultaneous transactions in order to limit risk and retain reward within a certain band of future prices.  As pointed out by @Nick R, this fee would be very significant, for a call option which had a price set below the current price. Typically, options are sold 'out of the money' initially, which means that at the current share price (at the time the option is purchased), executing the option would lose you money. If you purchase an 'in the money' option, the transaction cost initially would by higher than any apparent gain you might have by immediately executing the option. For a more realistic Options example, assume that it costs $15 initially to buy either the Call option, or the Put option. In that case, after buying both options as listed in your scenarios you would earn a profit if the share price exceeded $120 [The $120 sale price less the $90 call option = $30, which is your total fee initially], or dropped below $80 [The $110 Put price less the $80 purchase price = $30]. This type of transaction implies that you expect the price to either swing up, or swing down, but not fall within the band between $80-$120. Perhaps you might do this if there was an upcoming election or other known event, which might be a failure or success, and you think the market has not properly accounted for either scenario in advance. I will leave further discussion on that topic [arranging options of different prices to create specific bands of profitability / loss] to another answer (or other questions which likely already exist on this site, or in fact, other resources), because it gets more complicated after that point, and is outside the root of your question. "Aganju has mentioned put options, which are one good possibility. I would suggest considering an even easier strategy: short selling.  Technically you are borrowing the stock from someone and selling it.  At some point you repurchase the stock to return to the lender (""covering your short"").  If the stock price has fallen, then when you repurchase it, it will be cheaper and you keep the profit. Short selling sounds complicated but it's actually very easy--your broker takes care of all the details.  Just go to your brokerage and click ""sell"" or ""sell short.""  You can use a market or limit order just like you were selling something you own.  When it sells, you are done.  The money gets credited to your account.  At some point (after the price falls) you should repurchase it so you don't have a negative position any more, but your brokerage isn't going to hassle you for this unless you bought a lot and the stock price starts rising.  There will be limits on how much you can short, depending on how much money is in your account.  Some stocks (distressed and small stocks) may sometimes be hard to short, meaning your broker will charge you a kind of interest and/or may not be able to complete your transaction. You will need a margin account (a type of brokerage account) to either use options or short sell.  They are easy to come by, though. Note that for a given amount of starting money in your account, puts can give you a much more dramatic gain if the stock price falls.  But they can (and often do) expire worthless, causing you to lose all money you have spent on them.  If you want to maximize how much you make, use puts.  Otherwise I'd short sell. About IPOs, it depends on what you mean.  If the IPO has just completed and you want to bet that the share price will fall, either puts or short selling will work.  Before an IPO you can't short sell and I doubt you would be able to buy an option either. Foreign stocks?  Depends on whether there is an ADR for them that trades on the domestic market and on the details of your brokerage account.  Let me put it this way, if you can buy it, you can short sell it." Yes, if there is liquidity you can sell your option to someone else as a profit. This is what the majority of option trading volume is used for: speculative trading with leverage. you can try CME DataSuite. Your broker gives you real time options quotes. If you do not have one you can open a scottrade account with just $500 deposit. When I moved my money from scottrade to ameritrade they did not close my account even till this day I can access my scottrade account and see real time quotes and the same research they offered me before. You can try withdrawing your deposit and see if it stays open like mine did. SPX options are cash settled European style.  You cannot exercise European style options before the expiration date.  Assuming it is the day of expiration and you own 2,000 strike puts and the index settlement value is 1,950 - you would exercise and receive cash for the in the money amount times the contract multiplier.  If instead you owned put options on the S&amp;P 500 SPDR ETF (symbol SPY) those are American style, physically settled options.  You can exercise a long American style option anytime between when your purchase it and when it expires.    If you exercised SPY puts without owning shares of SPY you would end up short stock at the strike price. "(Note: out of my depth here, but in case this helps...) While not a direct answer to your question, I'll point out that in the inverse situation - a U.S. investor who wants to buy individual stocks of companies headquartered outside US - you would buy ADRs, which are $-denominated ""wrapper"" stocks.  They can be listed with one or multiple brokerages. One alternative I'd offer the person in my example would be, ""Are you really sure you want to directly buy individual stocks?""  One less targeted approach available in the US is to buy ETFs targeted for a given country (or region).   Maybe there's something similar there in Asia that would eliminate the (somewhat) higher fees associated with trading foreign stocks."