The buyer of a put option, according to Partnoy, wants the price of it to __________, whereas the seller of the option wants it to __________.

Question

Quizplus · Accepted Answer

The buyer of a put option benefits when the price of the underlying asset decreases, as it allows them to sell the asset at a higher strike price than the market price. Conversely, the seller (writer) of the put option benefits when the price stays the same or goes up, minimizing or negating the need for the buyer to exercise the option, thus allowing the seller to keep the premium without having to buy the asset at a higher price.

The Buyer of a Put Option, According to Partnoy, Wants