the change in the price of a put optionhn will be greater for a decrease in the price of underlying than for an increase in the underlying.
Why? Silly question I know, but it’s getting late in the day…
The holder of a put option is able to sell the asset at the assigned strike price.
If a security price is $10, and the put option has a strike price of $11, then the value of that put option is ~$1 (putting the time factor aside).
* If the security price goes up to $15, then the value of that put option has gone down – why would you want to sell it for $11 when you can sell it for its new market value at $15.
* If the security price goes down to $5, then the value of that put option has gone up – the holder of the put option now has the ability to sell it for $11 (…$6 more than the security’s current market value).