
282 Derivatives and Risk Management
12.17 Comparison Between the Gains Made by
a Put Buyer and a Put Writer
For an option buyer, the maximum loss is the option price paid by them for buying the option and the
maximum gain is the exercise price when the stock price is close to zero. For the option writer, the gain
is the maximum option price received by them at the time of writing the call, but the loss can be as high
as the exercise price. However, the gains of the writer are the losses of the buyer, and vice versa. us, an
option is a zero-sum game between the option writer and the option buyer. In addition, it can be seen
that the ter