What you said has little to do with dollars and cents and more to do with perspective. People short puts for all kinds of reasons, only one of which is that the

What you said has little to do with dollars and cents and more to do with perspective. People short puts for all kinds of reasons, only one of which is that they believe the stock is worth buying at that price. For example, someone might short a put if they have strong convictions the stock is going to have lower volatility than the implied vol of the price of the option, regardless of the intrinsic value of the stock. Or, as is likely in this case, that the market has priced in excessive volatility pre-earnings. From strictly a money point of view, this guy is sitting on a large unrealized loss simply because this thing unexpectedly got leaked. This event was obviously not priced into the option chain. His intention was to not be exposed to GOOG post-earnings and the black swan event of some idiot mis-releasing earnings caused him to get hammered.