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Buying a put option with a $50 exercise price for $10 means that at expiration, the value of the put option depends on the stock price. If the stock price drops to zero, the put option is worth $50 as the stock can be bought at zero and sold at $50. Conversely, if the stock price is $50 or higher, the put option becomes worthless. This results in a specific payoff diagram at expiration, reflecting the value of the option in different scenarios.
