The “Beauty of the Put” is that you know your absolute worst-case scenario before you even enter. Unlike shorting a stock, where your losses can grow forever, the Long Put has a “floor.”

The Scenario: NVDA Shoots Up to $218, $300, or Higher

If NVDA rallies and stays above your $218 strike price until the expiration bell rings:

• The Result: Your right to sell at $218 is worthless because the market is willing to pay more.

• The Loss: You lose exactly your initial investment of $3,040. No more, no less.

The “Partial Loss” Zone ($187.60 to $218)

If NVDA stays at $193 (where we started):

• Intrinsic Value: The option is worth $25.00 ($218 strike – $193 market price).

• Your Result: You can sell the option for $2,500. Since you paid $3,040, you have a partial loss of $540.

• The Takeaway: You only lose the entire $3,040 if NVDA finishes above $218.