what happens when you buy a put and the company goes out of business?

Im thinking of buying 100 $NKLA 2.5PUTs expiring Jan '22 or Jan '21.

 

When you buy puts and the company goes out of business (Practically stock goes to zero), your put will be worth slightly less than it's strike price.

So in the case of NKLA, 2.5 puts will be worth $250 each (theoretically). Practically, you will need to factor the bid/ask spread of the options.

 

https://www.elitetrader.com/et/threads/put-options-and-bankruptcy.11467/page-2

 

thx. i guess we can delete this thread.