Quote:
Originally Posted by Discuss Thrower
A long put has positive economic value where the Strike Price is lower than the Underlying Market Price.
For example, if underlying market price is $370, you can exercise the put option and sell the underlying security at the strike price ($360). You can immediately buy it back on the market for $370, realizing a profit of $370 – $360 = 10 per share, or $1,000 per option contract. With initial cost of $X, total result of the trade is $1000 – X= $???? profit.
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Ok, now I'm more confused. I thought if you buy a put, the only way to make money is if the current price of the stock is lower than the strike price.