What is a put option and what is its payoff?

• A. A put gives the holder the right to buy the underlying at the strike price; payoff is max(S - K, 0).
• B. A put gives the holder the right to sell the underlying at the strike price; payoff is max(K - S, 0).
• C. A put obligates the seller to buy at the strike price.
• D. A put guarantees profit regardless of price.

Answer: (B)