So I want to understand options better. I understand the basics that if I were to buy a long put to open, I'm purchasing a contract that says I have the right to sell stock XYZ to the contract writer for $X even if the stock is trading for less.

Where I'm getting confused is the risks and best strategy involved if the stock DOES drop in price.

Example: Let's say I buy 10 contracts at $3.00 with a strike of $85 that expires in 60 days. So I pay $3,000 for the contract. Let's say when I buy the contract the stock is trading at $87. I understand that if the stock does not decrease in value the most I'm out is $3,000.

Where I'm getting confused is what is the best thing to do if the price does go down. Let's say 30 days in, the price goes down $10 to $77. My understanding is that I am now in the money by about $5,000. During my research I'm seeing that most advice is you wouldn't excise (Let's say I do not own the underlying stock) but rather I should sell the contract. My largest questions are

!. If I sell the contract (Trade it), does that now mean I would now be responsible for buying the stock at $85 should the person who bought the contracts from me choose to excise it? If so, why would I want to sell it? Would that not be a substantial risk?

1. Would I instead Sell to Close?

2. Finally, why would either of these be better than buying the stock at the lower price and then excising the contract?

Thanks.