Same day, same strike and same expiry as the call in module F11, other side. On Monday 29 Jun 2026 the 24,000 put for the 7 Jul expiry settled at Rs 189.50 a unit, so one lot cost Rs 12,317.50. Nifty closed that day at 23,946.25. On 7 Jul it closed at 24,398.70, 1.89% higher. The right to sell at 24,000 was worth nothing, and the Rs 12,317.50 was gone. The call at that strike gained Rs 14,433.25 on the same move. A rise that fills one side empties the other. A put you never needed expires worthless, and for a buyer who held it as cover that is the cost of the cover. This lesson takes the put apart, then the six positions that make up F&O.
3By the end you can
- Say what a put buys, and work out its breakeven and result for one lot.
- Explain why an index fall alone does not make a bought put profitable.
- Name the six positions of F&O and who carries the duty in each.
The idea, plainly
Think of a shop that sells a phone with a paid buy-back offer. For a fee, the shop will take the phone back at the price you paid, on one fixed day three months from now. If the phone's price has crashed by then, you use the offer. If it has not, the fee is gone and you keep the phone. A put option is that offer on the Nifty. The price you can sell back at is the strike. The fee is the premium. Everything from the last lesson carries over: the lot is 65 units, the right is used only on expiry day, and settlement is in cash. Only the direction flips.
- Buy a future. You hold the duty to buy at the agreed price. You gain when the index rises. A fall can cost far more than the margin posted.
- Sell a future. You hold the duty to sell at the agreed price. You gain when the index falls. The loss has no cap.
- Buy a call. You hold the right to buy at the strike. You gain when the index rises past the strike plus the premium. The worst case is the premium.
- Sell a call. You take the premium and the duty to pay out any rise above the strike. You keep the premium while the index stays at or below the strike. The loss has no cap.
- Buy a put. You hold the right to sell at the strike. You gain when the index falls below the strike less the premium. The worst case is the premium.
- Sell a put. You take the premium and the duty to pay out any fall below the strike. You keep the premium while the index stays at or above the strike. The worst case is the strike less the premium, times the lot, if the index went to zero.
The term this section turns on: Put option
Read 2 more paragraphs, 53 words
Calls and puts each have a buyer and a seller. With futures, that makes six positions. Together they are the whole of F&O.
The buyer's side is the one this lesson follows. The sellers' side is in module F13, and the call is in module F11. Module F07 covers the futures rows.
How a put's price moves
A put gains value as the index falls and loses value as it rises. It also loses a little every day as time passes. So a put has two enemies, a rising index and the calendar, and one main friend, a sharp fall. A rise in implied volatility lifts it too, as module F15 shows. The strike matters as well. On 29 Jun the 23,800 put settled at Rs 107.00 and the 24,000 put at Rs 189.50, because the right to sell higher is worth more.
What a put is worth on expiry day
At expiry a put is worth the strike minus the index close, or nothing, whichever is larger. Take away the premium and you have the result. The result is zero when the index closes at the strike less the premium. That is the breakeven.
Breakeven =
strike less premium
A bought put loses the premium above the strike and gains as the index falls
Read one more paragraph, 58 words
The 24,000 put had a breakeven of 23,810.50, 0.57% below the 29 Jun close. Below it, every point of fall adds a rupee a unit. The gain has a ceiling, because the index cannot go below zero: the most this lot could make is Rs 15.48 lakh. Above the strike the loss stops at the premium.
Who buys a put
Two kinds of buyer. One expects the index to fall. That view is the buyer's own and is not a signal for anyone else. The other already holds Nifty exposure, through shares or a future, and wants a floor under it. For that buyer the put is insurance, bought knowing that most insurance goes unused. With a put under a holding, the most the pair can lose is the drop to the strike plus the premium, however far the index falls. Module F27 puts a put under a holding, and module F28 asks when the cost is worth it.
Three things must line up for a bought put to pay: the index falls, it falls far enough to cover the premium, and it does so by expiry. Miss one and the buyer is out of pocket.
A bought put pays only when all three conditions hold
Worked example: the put that expired worthless, 29 Jun to 7 Jul 2026
We follow one lot of the 24,000 put from the close of 29 Jun to settlement on 7 Jul, before charges. Settlement is the Nifty close on expiry day, the rule for every expiry before 7 Dec 2026. It is the mirror of the call in module F11, so the two are worth reading together.
| Step | What we read | Value |
|---|---|---|
| 1 | Nifty close, 29 Jun | 23,946.25 |
| 2 | Strike of the put | 24,000 |
| 3 | Premium per unit | 189.50 |
| 4 | One lot of 65 units, paid upfront | Rs 12,317.50 |
| 5 | Breakeven at expiry: strike less premium | 23,810.50 |
| 6 | Nifty close, 7 Jul, the settlement | 24,398.70 |
| 7 | Value of the right: strike less close, never below zero | 0 |
| 8 | Result: value less the price paid | −Rs 12,317.50 |
Nifty rose 1.89% in 8 calendar days and the put expired worthless. Now run the same lot through other finishes.
| Nifty closes at | Right is worth, per unit | Result, one lot |
|---|---|---|
| At or above 24,000 | 0 | −Rs 12,317.50 |
| 23,900 | 100 | −Rs 5,817.50 |
| 23,810.50 | 189.50 | 0 |
| 23,500 | 500 | Rs 20,182.50 |
Read one more paragraph, 68 words
The put pays only below the breakeven, and the loss is capped at what was paid. One week proves nothing: a falling week would have ended in the last row. Charges come out of the result as well. Since 1 Apr 2026, STT on an option that expires in the money is 0.15% of its intrinsic value, paid by the buyer, on top of brokerage and exchange fees.
The common mistake
The belief: A put makes money whenever the market falls.
Test it on two puts bought on the same Tuesday, 16 Jun 2026, at the 24,000 strike, when Nifty closed at 23,989.15. Nifty finished lower at both expiries. The weekly put made Rs 295.75 on Rs 11,137.75. The put that ran to 30 Jun lost Rs 5,980.00, because it cost more and the fall was smaller than its premium. A put needs the index to fall below the strike less the premium, and to do it by expiry. Read the breakeven first, then ask how far and how soon.
| Put bought 16 Jun | Paid | Nifty closed | Per lot |
|---|---|---|---|
| Expiry 23 Jun | 171.35 | 23,824.10 | Rs 295.75 |
| Expiry 30 Jun | 226.25 | 23,865.75 | −Rs 5,980.00 |
Nifty closed below the strike on both expiries, and only one put paid
Key takeaways
- A put is the right to sell at the strike, paid for with a premium.
- A bought put risks its premium and no more.
- Breakeven is the strike less the premium.
- The fall must beat the premium, and it must come by expiry.
- A put under a holding puts a floor under the loss.
- F&O has six positions: buy or sell a future, a call, a put.
Two terms to hold on to from 14.2
Before you trade. Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. Read the SEBI study