Payoff from Put Options - A long put is simply the buy of one put option. It is a Bearish Strategy. It is used when the spot price is expected to be less than the strike price by maturity. The Maximum Loss is Limited to the extent of premium paid and it arises when Spot Price > Strike Price. The maximum profit is Unlimited as the market falls and when Spot Price < Strike Price.

The payoff from a long position in a put option is given by:

Max (E – S, 0) – P

A short put is simply the sale of one put option. It is a Bullish Strategy. It is used when the spot price is expected to be more than the strike price by maturity .The Maximum Loss can be Unlimited as market falls and it arises when Spot Price < Strike Price. The Maximum Profit is limited to the extent of premium paid and it arises when Spot Price > Strike Price

The payoff from a short position in a put option is given by:

Min (E – S, 0) + P

Where,
E = Strike price
S = Price of the underlying security at maturity
P = Put option premium