Suppose that you write a put contract with a strike price of 40 and an expiration date in 3 mon

Question

Suppose that you write a put contract with a strike price of  40 and an expiration date in 3 mon

Accepted Answer

When you write a put contract, you are committing yourself to potentially buying the underlying

Suppose that you write a put contract with a strike price of $$\$ 40$$ and an expiration date in 3 months. The current stock price is $$\$ 41$$ and the contract is on 100 shares. What have you committed yourself to? How much could you gain or lose?