---
title: "Put option explained: strike, premium and payoff in India"
description: "A Nifty put as a priced right to sell: breakeven, result for one lot, why a fall alone does not pay, and the six positions of F&O, on dated NSE data."
source_url: "https://www.rupeecase.com/learn/path-14/module-14-2-put-option-explained"
---

[Path 14 2 of 17](/learn/path-14/)The put option, told as a story[Next 14.3](/learn/path-14/module-14-3-option-buyer-vs-seller)

Same day, same strike and same expiry as the call in [module F11](/learn/path-14/module-14-1-call-option-explained), 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

1. Say what a put buys, and work out its breakeven and result for one lot.
2. Explain why an index fall alone does not make a bought put profitable.
3. Name the six positions of F&O and who carries the duty in each.

Watch in the terminal: how do I put the terminal on my home screen? A short tutorial on sample data.

## 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

From the module glossary; every term is in the Learn glossary too. Source: Module 14.2, The put option, told as a story.
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](/learn/path-14/module-14-3-option-buyer-vs-seller), and the call is in module F11. [Module F07](/learn/path-13/module-13-1-futures-basics-mark-to-market) 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](/learn/path-14/module-14-5-what-moves-an-option-price) 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

One lot of the 24,000 put bought for Rs 12,317.50 on 29 Jun 2026, expiry 7 Jul. The straight lines show the result at expiry. The curves show the result on the example date and four days on, from the Black 76 engine. The tag marks the open end of this chart only: the gain stops at Rs 15.48 lakh if the index went to zero. Source: NSE end of day data, computed by RupeeCase. As of 29 Jun 2026.
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](/learn/path-17/module-17-3-covered-call-and-protective-put) puts a put under a holding, and [module F28](/learn/path-17/module-17-4-why-hedge) 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

Each step is a separate test. Passing the first two but missing the expiry date still loses the premium. Source: NSE, equity derivatives contract specifications. As of 16 Oct 2026.

## 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 |

Watch in the terminal: what does "Same money in NIFTY 50" mean? A short tutorial on sample data.
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

Nifty 50 daily closes from 16 Jun to 30 Jun 2026. The line marks the strike of both puts. Below the strike is not enough: the fall has to beat the premium. Source: NSE end of day data, computed by RupeeCase. As of 30 Jun 2026.

## 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

From the module glossary. Source: Module 14.2, The put option, told as a story.
**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](https://www.sebi.gov.in/reports-and-statistics/research/aug-2026/study-profitability-of-individual-traders-in-the-equity-derivatives-segment-fy25-fy26-_103835.html)

What does The put option, told as a story cover?A put is a right to sell, paid for with a premium. What it costs, what it needs and what it pays, and the six positions that make up F&O. It works through The idea, plainly, Worked example: the put that expired worthless, 29 Jun to 7 Jul 2026, The common mistake, Key takeaways. It is module 14.2 of Path 14, Options and Greeks, about 8 minutes of reading, free.

TTry it

## Payoff builder, on the same example.
Legs from a dated chain, the expiry and before expiry curves, breakevens and the charges. Dated NSE end of day data, nothing live, no orders.

**Payoff builder**, Nifty, 29 Jun 2026, 7 Jul 2026 expiry.

[Open the payoff builder](/learn/tools/payoff-builder?chain=NIFTY_2026-06-29_2026-07-07&preset=long-put)

  AF&O on RupeeCase

## Hedging only, in development
F&O at RupeeCase will do one job: protect a portfolio you already own, by a rule published before it runs. No speculation, no naked option selling, no leveraged bets. It is not available yet.

  [How hedging will work](/hedging)[Sign up for RupeeCase](https://invest.rupeecase.com/signup)

  [No hedgeFalls with the marketWith a putA floor, for a premiumIllustration with made up numbers, not a product and not a recommendation.](/hedging)

QQuick check

## 10 questions, 7 to pass.
Each attempt draws 10 of the 15 questions in this module's bank, and a retake draws a fresh set. A pass gives this module's Certificate of Completion. Your result stays on this device and counts towards the Path 14 certificate.

7 of 10 correct passes module 14.2

Every answer is explained when you check; a retake is always free. Source: RupeeCase Learn quiz rules (70% to pass).

  Passed

###

  Certificate ID

Download PNGPrint or save as PDF[Check the ID](/learn/certificates/verify)
Self paced and unproctored. A record of completing free education by RupeeCase; not a NISM certificate and not endorsed by NISM, NSE, BSE or SEBI. It qualifies no one to deal, advise or publish research.

CCheck yourself

## Path 14 so far.
Your quick check results on this device, stop by stop.

Stop 2 of 17 on Path 14

Options and Greeks: every live stop, this module ringed. Source: RupeeCase Learn, Path 14.

1. [14.1The call option, told as a storyNot yet](/learn/path-14/module-14-1-call-option-explained)
2. [14.2The put option, told as a storyNot yet](/learn/path-14/module-14-2-put-option-explained#quiz)
3. [14.3Buyer or seller: payoffs, margin, win rate and expectancyNot yet](/learn/path-14/module-14-3-option-buyer-vs-seller)
4. [14.4Moneyness, intrinsic value and time valueNot yet](/learn/path-14/module-14-4-moneyness-intrinsic-and-time-value)
5. [14.5Five things that move an option's priceNot yet](/learn/path-14/module-14-5-what-moves-an-option-price)
6. [14.6Expiry and settlement: cash, physical, exercise and STTNot yet](/learn/path-14/module-14-6-expiry-and-settlement)
7. [14.7Delta: speed, hedge ratio and the probability shortcutNot yet](/learn/path-14/module-14-7-delta)
8. [14.8Theta: the time decay curve into expiryNot yet](/learn/path-14/module-14-8-theta-time-decay)
9. [14.9From a binomial tree to Black Scholes and Black 76Not yet](/learn/path-14/module-14-9-binomial-tree-to-black-76)
10. [14.10Put call parity and synthetic positionsNot yet](/learn/path-14/module-14-10-put-call-parity)
11. [14.11Gamma: why it grows so fast near expiryNot yet](/learn/path-14/module-14-11-gamma)
12. [14.12Vega: volatility exposure across weekly and monthly expiriesNot yet](/learn/path-14/module-14-12-vega)
13. [14.13Rho and interest rates in Indian optionsNot yet](/learn/path-14/module-14-13-rho)
14. [14.14Position Greeks for multi leg strategiesNot yet](/learn/path-14/module-14-14-position-greeks)
15. [14.15Dynamic delta hedging and the P&L identityNot yet](/learn/path-14/module-14-15-delta-hedging)
16. [14.16Gamma scalpingNot yet](/learn/path-14/module-14-16-gamma-scalping)
17. [14.17Second order Greeks: vanna, volga, charm, speed and colourNot yet](/learn/path-14/module-14-17-second-order-greeks)
18. [TPath test, 30 questionsNot yet](/learn/path-14/module-14-17-second-order-greeks#pathTestSection)

Path 14 in reading time: 149 minutes over 17 modules

Minutes of reading per module, this one in amber. Source: RupeeCase Learn, Path 14.

    Explore next

## Put the module to work.

* [Free module 14.1The call option, told as a story8 min read](/learn/path-14/module-14-1-call-option-explained)
* [Free module 14.3Buyer or seller: payoffs, margin, win rate and expectancy9 min read](/learn/path-14/module-14-3-option-buyer-vs-seller)
* [Free module 14.4Moneyness, intrinsic value and time value8 min read](/learn/path-14/module-14-4-moneyness-intrinsic-and-time-value)
* [Free module 17.3Covered call, protective put and cash secured put8 min read](/learn/path-17/module-17-3-covered-call-and-protective-put)
* [Free module 17.4Why and when to hedge: insurance in plain numbers8 min read](/learn/path-17/module-17-4-why-hedge)
* [Path 14Options and Greeks17 modules live, 0 coming next](/learn/path-14/)

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SSources

## Go to the source.
6 sources, NSE the most cited

The publisher of each source listed below. Source: Module 14.2 source list.
1. [NSE, equity derivatives contract specifications (lot size, expiry, European style, cash settlement)](https://www.nseindia.com/static/products-services/equity-derivatives-contract-specifications) NSE
2. [NSE circular NSE/FATAX/73524 (STT rates from 1 Apr 2026, including STT on an exercised option)](https://nsearchives.nseindia.com/content/circulars/FATAX73524.pdf) NSE
3. [SEBI Investor, Understanding derivatives](https://investor.sebi.gov.in/understanding_derivatives.html) SEBI
4. [SEBI, master circular on exchange traded derivatives: the index settlement price is the index close on expiry day (clauses 1.1.9 and 2.1.9)](https://www.sebi.gov.in/sebi_data/commondocs/dec-2024/RE_Chapter%205%20-%20Exchange%20Traded%20Derivatives%20FINAL_1_p.pdf) SEBI
5. [NISM, Series VIII Equity Derivatives: test objectives (options unit)](https://www.nism.ac.in/revamp-nism/test-objectives-revised-nism-series-viii-equity-derivatives-certification-examination/) NISM
6. Natenberg, S., Option Volatility and Pricing, McGraw-Hill Book

GTerms

## 4 terms from this module.
Put optionA contract that gives the buyer the right, not the duty, to sell the underlying at the strike price, in return for a premium. A Nifty put can be used only on its expiry date.
Protective putA put bought alongside shares or a future the holder already owns, to put a floor under the loss below the strike.
Option writerThe seller of an option, who takes the premium and carries the duty if the buyer uses the right.
BreakevenThe index level at expiry where an option's result is zero. For a bought put it is the strike less the premium.
[All 230 terms in the glossary](/learn/glossary)

[Question people askWhat are futures and options (F&O kya hai)?A short answer with a dated chart](/learn/questions/what-are-futures-and-options)[Related module14.1 The call option, told as a story8 min, Beginner](/learn/path-14/module-14-1-call-option-explained)[Related module14.3 Buyer or seller: payoffs, margin, win rate and expectancy9 min, Beginner](/learn/path-14/module-14-3-option-buyer-vs-seller)[Pillar guideDerivatives and Quant115 modules across paths 12 to 19](/learn/derivatives)

Education only, not investment advice, a research report or a recommendation to buy, sell or hold any security. RupeeCase (QC Alpha Technologies Pvt Ltd) is not registered with SEBI as an investment adviser or research analyst. Contracts and prices shown are for illustration only, come from NSE end of day files at least 30 days old, and are not recommendatory. Derivatives trading carries a high risk of loss.