A put option gives the buyer the right, but not the obligation, to sell the underlying asset at the agreed-upon strike price before or at the expiration date. If you buy a put option then at the end of expiry you get the right to sell the underlying security at the strike price of the option you have chosen, you can also forfeit this right by not exercising the option. The seller (writer) of the put option has the obligation to buy the underlying asset if the buyer decides to exercise the option.

For example, consider Reliance is trading at ₹2500. If you buy a put option with a ₹2500 strike price and a ₹100 premium, and on the expiry date, Reliance is trading at ₹2200, you can exercise the put option. This allows you to sell Reliance at ₹2500 to the option writer. In this scenario, you profit ₹200 per (₹2500 – ₹2200 – ₹100), while the option writer incurs the same loss. It’s essential to note that option premiums change dynamically in live markets, prompting traders to engage in both and trades to capitalize on these fluctuations.