Two weeks later, Company XYZ misses earnings and the stock price plunges to . buy to open put example
The price at which you have the right to sell the stock. Two weeks later, Company XYZ misses earnings and
Your right to sell at $95 is now very valuable. The option is worth at least $15 per share ($95 strike - $80 market price). Two weeks later
Strike Price minus Premium (In this example: $93).
The contract is now worth $1,500. After subtracting your initial $200 investment, your profit is $1,300 . 2. The Hedge (Stock Stagnates) The stock stays flat at $100 .