I bought a put option yesterday 10/20/22 with a strike price of $26. The price of the security was at $28.00, and the expiration set for 11/18/22. The security price dropped to $20.00 overnight. Why is my option almost worthless now. The IV was at 43% when I bought it. Also, if I hold and the price comes back up will my option gain value?
Also, if I hold and the price comes back up will my option gain value?
No, puts have negative delta; if the price goes up, your option will lose value. They are essentially partial shorts: you lose money if the stock doesn't go low enough, but unlike a full short your loss is limited to the premium.