Bankruptcy Questions Answered

What happens to the value of Put Options if the underlying stock goes bankrupt?

Speculating Filter: What happens to the value of a Put Option if the underlying stock halts trading and/or goes bankrupt? I’m a believer in a housing bubble and a bear on the residential real estate market.

I recently made my first foray into speculating by going long LEAP Puts (Long Term Equity AnticiPation Securities) on several homebuilders.

Doing some quick calcs on one of them (homes started, homes in inventory, rate of sale, % decline in median price, holding costs, cash on hand) I think there is a chance one of them might go bankrupt before the LEAPS expire if the housing market continues to decline.

What happens to the value of a Put Option if the underlying stock goes bankrupt and/or halts trading? Does the option become worthless because it can’t actually be exercised?