™At expiration a $50 strike put with the stock at $40 has $10 intrinsic value per share; a buyer subtracts the premium paid to calculate the result.
Options
Put option
A contract generally giving the buyer the right, but not the obligation, to sell at the strike price.
Plain-English context
Put the definition to work.
A long put's premium and a short put's potential purchase obligation are different risk profiles.
Further reading and verification. Examples are hypothetical, not current quotes or recommendations. Product terms, tax treatment and market rules can change. OCC / Options Industry Council — options basics