Payoff diagram for a short put option

Author: Toplisa Date of post: 23.05.2017

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Finance and capital markets Options, swaps, futures, MBSs, CDOs, and other derivatives. Call option as leverage.

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Put writer payoff diagrams. Call writer payoff diagram.

payoff diagram for a short put option

Put-call parity arbitrage I. Put-call parity arbitrage II. Option expiration and price.

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This is what you tend to see in academic settings like business schools or textbooks. And the other one will actually draw a profit and loss based-on that option position, so incorporate the price you actually paid for the option. You tend to see this more in practice.

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So you have a put option. So the stock let's say at expiration.

Short Put Payoff Diagram and Formula - Macroption

All of these are at expiration. What is the put option worth? So, it's kinda worth nothing. You don't really doesn't have any value anymore. But, we have to incorporate the fact that you paid 10 dollars for the option.

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