All cases
Set an expiry floor on an equity holding
Protect a share position with a put · Fictional case
The situation
An investor owns shares bought at ₹500 and pays ₹15 per share for a ₹470 strike put. Compare expiry prices of ₹420 and ₹560.
Your task
What is combined profit per share in each state?
Reveal step-by-step solution
Set up the problem
At ₹420, put pays ₹50. Combined proceeds = ₹420 + ₹50 = ₹470.
Work through the numbers
At ₹560, put pays zero. Combined profits after the ₹515 total initial cost are −₹45 and +₹45.
Interpret the result
The modeled maximum expiry loss is ₹45 per share before fees. Confirm lot size and expiry match the holding.
What to remember
Add stock and put proceeds, then subtract stock cost and premium.