When you exercise a put option and make profit on it, who is buying this stock that you So my question is, is there a specific formula for calculating those option prices? or sell (put) a stock at a certain price that may be different from what the actual market value is. Once again, we're dealing with the American variation. As soon as a formula is right for any length of time, its own success carries the weight of its inevitable failure” Michael Steinhardt “There is no perfect strategy . People flocked in droves to growth stock investing, real estate, portfolio insurance, Japanese stocks, emerging market stocks, tech stocks, dot-coms and venture capital. Thus, the stock price is a relative and proportional value of a company's worth and only represents percentage changes in market cap at any given point in time. Any percentage changes in a stock price will result in an equal percentage change in a company's value.