When you buy a put option it gives you the right but not the obligation to sell an underlying asset at a predetermined date.
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This is the difference between the price you have an option to buy Xyz at in this case $40 and the price it is actually trading at $50.
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The reverse of this is a put (right to sell) option on an underlying asset.
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The day after the expiration date an option has no value.
He also has the knowledge that he can buy that piece of property at any time in the next sixty days at the price he has already agreed upon.