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Profits from Buying a Put Option: Payoff Diagram 👍

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Payoff diagram for Put Options. http://www.financial-spread-betting.com/ PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! A put option gives us the right but not the obligation to sell a specific underlying asset at a specific strike price at a specific point in time in the future. Let's examine two different payoff diagrams to see what our option contract will be worth at expiry and what our profit and loss will be (dependent on what we paid as premium for the option). - Let's say Company XYZ trading at $50 - We have purchased a put option with a strike price of $50 to expire at some fixed point the future. - Let's assume the Put carries an Option Premium of $10 - If the company went bust and it ended traded at $0 - that's great for us as a put option holder as we can sell the stock option at $50. - Let's say the price of XYZ ends at $10. The put option would have $40 of value. - Let's say the price of XYZ ends at $60. The put option wouldn't have any value. The maximum loss is limited to the price of the put option premium irrespective how high the stock price rises. Complete Options Trading Course Check the rest of the videos on our Options Trading videos playlist at https://www.youtube.com/watch?v=43bk2a6CPr8&list=PLnSelbHUB6GQJHlFjss97-zlhYi_ndq9K
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Text Comments (5)
Firas (3 months ago)
More Options Videos!! that's awesome
checkthisout 00147 (3 months ago)
Very interesting video - Thank you! Would be really cool to see more videos about options...
LiveSignalTrade (3 months ago)
Super interesting !
Jake Hunter (3 months ago)
Options and futures trading hurt my head lol. But I’ll get it and thanks again for the knowledge tips #Jakehunter88
j jones (3 months ago)
So many options , so little time .

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