Why is buying a put option a cash outflow, but shorting inflow? What advantage are there to shorting the stock as opposed to buying put option : finance


  Buying a put is a cash outflow, while shorting is an inflow. One advantage is that you can reinvest this inflow into another position.


In both cases  you're hoping to profit, and have money flow INTO your account, from a stock price's decrease.
When you buy a put option, you're taking possiession of something from someone else, and paying for it.

When you short, you're borrowing shares, and selling them, which brings cash in for you.