Single-Option Payoffs

The Put Payoff

A put payoff is positive when price is below strike.

highlighted = computed this step

Long put payoff

A long put is the right, not an obligation, to sell at strike. At $80.00 payoff is $20.00; at $100.00 payoff is $0.00; at $120.00 payoff is $0.00.

payoff(S)=max⁡(K−S,0)\text{payoff}(S)=\max(K-S,0)
Long put, K=$100Payoff at expiry.Long put, K=$100Long put, K=$100Underlying price at expiryPayoff$80$100$120$-2.00$+0.00$+22.00K=$100

Payoff convention

This is an expiry-only chart with no premium, carrying, or time path effects.

payoff(K=$100.00)\text{payoff}(K{=} \$100.00)
Long put, K=$100Payoff at expiry.Long put, K=$100Long put, K=$100Underlying price at expiryPayoff$80$100$120$-2.00$+0.00$+22.00K=$100