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You sell a put option on AAPL with a strike of K=211. At maturity of the put, the price of AAPL is $202.00. What is
You sell a put option on AAPL with a strike of K=211. At maturity of the put, the price of AAPL is $202.00. What is the "payoff per option from the put option? Do not multiply by 100 for a lot of options. A buyer of put has you the right, but not the obligation to sell the underlying at the strike price, instead of selling it at the market price. If the price on the market is lower than the strike, than the seller of the put can use the option to sell at a higher price. We call this difference in price the "payoff of the option". If the price on the market is higher, then the option is worthless and the payoff of the option is simply zero. NOTE: Here, you "SELL" the put. So you are responsible for the payoff of the option to the buyer of the put. If the buyer makes $5, it is because you lose $5. The option payoff for the seller of the option is always negative
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