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If an option has intrinsic value, it is in the money (ITM).No matter how far the stock falls, the put option writer is liable for purchasing shares at 260, meaning they face theoretical risk of 260 per share, or 26,000 per contract (260 x 100 shares) if the underlying stock falls to zero.
For this option they paid a premium.72, or 72 (0.72 x 100 shares).Verb put put; putting transitive verb 1a : to place in a specified position or relationship : lay put the book on the table b : to move in a specified direction c(1) : to send (something, such as a weapon or missile) into.