Long Put Calculator

What is a Long Put?

A long put is the simplest way to profit from a stock going down using options. You buy a put option, which gives you the right to sell 100 shares at the strike price on or before the expiry date. You pay a premium up front for that right.

If the stock falls well below the strike, the put becomes more valuable and you can sell it for a profit. If the stock stays at or above the strike at expiry, the put expires worthless and you lose what you paid. Your loss can never be more than the premium, and your profit grows the further the stock falls.

How to use this calculator

1. Enter the stock's current price. Adding the ticker symbol is optional.
2. Enter the strike price of the put you're buying, and the premium per share.
3. Set the expiry date, or type the number of days to expiry.
4. Enter how many contracts you're buying and any fees per contract.

The calculator updates as you type. You'll see:
- What the put costs you, which is also your maximum loss, plus your maximum profit and break-even price.
- Your chance of making a profit and of losing the full cost.
- Your profit or loss if the stock falls 10% or 20% by expiry.
- A chart of your profit or loss at different stock prices, today, at two dates in between, and at expiry. Hover over the chart (or tap it on a phone) to read exact values.
- A table of profit or loss by stock price and date, shown in dollars or as a percentage of your cost.

You can find the premium in your broker's option chain. Use the mid-price between the bid and the ask for a realistic figure. Under "Manual settings" you can enter the implied volatility yourself, change the interest rate, or set the price range shown in the chart and table.

When is a Long Put a good choice?

- You expect the stock to fall, and to fall far enough and soon enough to get past your break-even before expiry.
- You want to protect shares you own against a drop, as a form of insurance (often called a protective put).
- You want a bearish trade with a known, limited risk, rather than selling shares short.
- Implied volatility is low. Options are cheaper, so you pay less for the same strike.

When might it not suit?

- You expect only a small fall. Time decay can eat away the put's value before the move happens. A bear put spread may suit you better.
- Implied volatility is high, for example just before earnings. Options are expensive and can lose value quickly once the news is out.
- You need time for your idea to work but are buying a short-dated option.

Things to keep in mind

- At expiry, you need the stock below the strike minus the premium you paid just to break even.
- Puts lose value every day as expiry gets closer (time decay), and this speeds up in the last few weeks.
- You don't have to hold to expiry. Many traders sell the put early to lock in a profit or cut a loss.
- Stocks often fall faster than they rise, so puts are frequently priced with higher implied volatility than calls.

This calculator gives estimates for educational purposes only. It isn't financial advice. Option prices before expiry are modelled, and real prices will differ.