This article needs additional citations for verification. Please help improve put option payoff formula d board article by adding citations to reliable sources. Unsourced material may be challenged and payogf. (November 2015) ( Learn how and when to remove this template message)In finance, a put or put option is a stock market device which gives the owner of a put the right, but not the obligation, to sell an asset (the underlying), at a specified price (the strike), by a predetermined date (the expiry or maturity) to a given party (the seller of the put).

If the stock is above the strike at expiration, the put expires worthless. A profit and loss diagram, or risk graph, is a visual representation of the possible profit and loss of an option strategy atThis page explains put option payoff. Long Put Option Position is BearishWhile a call option gives you the right to buy the underlying security, a put option represents the right (but not obligation) to sell the underlying at the given strike price.

When holding a put option, you want the underlying price go down, because the lower it gets relative to the strike price, Option Pricing ModelsThe purpose of an option fornula model is to determine the theoretical fair value for a call or put option given certain known variables. For put options it is the maximum of either 0 or the strike price minus the underlying price.

## Put option payoff formula d board