Long Put Options Calculator
Calculate max profit, max loss, and breakeven for a long put position. Visualize downside profit potential at expiration.
Buy a put option to profit from a downward move in the underlying stock. Your risk is limited to the premium paid. Profit grows as the stock falls toward zero.
Strategy Legs
How the Long Put Strategy Works
A long put is the simplest bearish options strategy. You buy a put option, paying a premium upfront, and profit when the underlying stock falls below the strike price minus the premium paid. Your maximum risk is the premium — the put expires worthless if the stock stays above the strike.
This is the opposite of buying a call. Instead of betting on upside, you're betting on downside. Long puts are also used as portfolio insurance — buying puts on stocks you own protects against crashes. The cost of the put is like an insurance premium.
The calculator shows the exact breakeven, max loss, and how profit grows as the stock drops. Unlike short selling, your risk with a long put is always defined. You can never be margin called, and your loss is capped at the premium even if the stock doubles.
Formula
Breakeven = Strike Price − Premium Paid. Max Loss = Premium × 100 × Contracts. Max Profit = (Strike − Premium) × 100 (stock goes to $0).
Example
You think META will drop after a privacy scandal. It's at $500. You buy a $500 put for $12.00.
Your cost is $12.00 × 100 = $1,200. Breakeven is $500 − $12 = $488. If META drops to $450, your profit is ($488 − $450) × 100 = $3,800. If META stays above $500, you lose the $1,200 premium. Compared to shorting 100 shares at $500 ($50,000 margin requirement), the put gives you bearish exposure for 2.4% of the capital.
Frequently Asked Questions
Is buying a put better than short selling?
For most retail traders, yes. Short selling has unlimited theoretical risk (a stock can go up forever), requires margin, and subjects you to short squeeze risk and borrow fees. A long put has defined max loss (the premium), no margin requirement, and no borrow cost. The tradeoff is time decay — puts expire, shorts don't.
Can I use puts to protect my stock portfolio?
Yes — this is called a protective put or married put. Buying puts on stocks you own acts as insurance against a crash. If the stock drops below the strike, the put gains offset your stock losses. The cost is the premium, which is typically 2-5% of the stock value for 3-month protection.
How far out-of-the-money should I buy puts?
It depends on your thesis. ATM puts are most expensive but profit immediately on any drop. OTM puts are cheaper but need a bigger move. For hedging, 5-10% OTM puts are common — they protect against crashes but don't cost as much as ATM protection.
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Disclaimer: This calculator is for educational purposes only and does not constitute financial advice. Trading involves substantial risk of loss. Past performance does not guarantee future results. Always do your own research and consult with a licensed financial advisor before making investment decisions.