Long Put Calculator

Single-Leg OptionsbearishDefined Risk

Buy a put option to profit from a bearish move with limited risk.

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What Is a Long Put?

A long put is the basic bearish options trade: you buy a put option, which gives you the right but not the obligation to sell 100 shares of the underlying at the strike price any time before expiration. You pay a premium up front, and that premium is the maximum loss.

The trade profits when the stock falls far enough below the strike to cover the premium. Each dollar the stock drops beyond breakeven adds $100 of intrinsic value per contract. Profit is capped only because the stock cannot fall below zero, so the maximum gain is the strike minus the premium, multiplied by 100.

The payoff diagram is a flat line at the negative premium for every price at or above the strike, then a 45 degree slope upward as the stock falls below it. Time decay works against you and a drop in implied volatility hurts. Puts often benefit from a volatility rise during a sell-off, though, because fear inflates option prices, so a fast decline tends to pay better than a slow one.

Setup

BUY1x ATM PUT

Max Profit

Strike price - premium (if stock goes to $0)

Max Loss

Premium paid

Breakeven

Strike price - premium paid

Long Put Example

XYZ trades at $100 with 45 days to expiration. You buy the $100 put, at the money, for $3.80 per share. The net debit is $380 for one contract, which is the most you can lose. The breakeven at expiration is the $100 strike minus the $3.80 premium, or $96.20.

Stock at expiration	Result
$105 (or anything at or above $100)	The put expires worthless. You lose the full $380 premium, the maximum loss.
$96.20	Breakeven. The put is worth $3.80 of intrinsic value, matching what you paid. P&L is $0.
$90	The put is $10.00 in the money and worth $1,000. Minus the $380 debit, profit is $620.
$80	The put is worth $2,000. Minus the $380 debit, profit is $1,620.

Maximum loss is the $380 premium if XYZ finishes at or above $100. Breakeven is $96.20. The theoretical maximum profit is $9,620 if the stock goes to zero, calculated as the $100 strike minus $3.80, times 100.

When to Use a Long Put

You expect a sharp decline in the stock within a specific period, such as into an earnings report or after a technical breakdown.
Implied volatility is low relative to its recent range, so puts are cheap and a spike in fear would inflate their value.
You want to hedge a long stock position against a drawdown without selling the shares, often called a protective put.
You want bearish exposure without the borrow costs, margin requirements or unlimited risk of shorting the stock outright.
Typical directional entries use 45 to 90 days to expiration and a strike at or slightly in the money, around 40 to 60 delta, so the option responds meaningfully to the move you expect.

Risks to Understand

Time decay erodes the premium every day the stock does not fall, and the erosion accelerates inside the final month.
Stocks tend to drift higher over long periods, so a bearish thesis has to overcome both time decay and the market's upward bias.
If the decline you expected arrives after expiration, the option expires worthless even though the thesis was correct. Timing is as important as direction.
Implied volatility is often already elevated when a stock looks weak, so you may be paying a high price for the put.
Far out-of-the-money puts are cheap but have a low probability of finishing in the money, and their bid-ask spreads are proportionally wide.

Managing the Trade

Set a profit target and a stop before entering. A common approach is to take profit at 50 to 100 percent of the premium and exit if the put loses half its value.
After a sharp drop, consider selling a lower strike put against the position to create a bear put spread. This locks in part of the gain and offsets further time decay.
If the stock is falling slowly and the thesis holds, roll to a later expiration before the last 30 days rather than letting the option decay to zero.
Watch implied volatility. If a sell-off has pushed volatility to extremes, taking profit before it retreats can add to the return.
For a protective put on owned shares, choose an expiration that covers the event you are worried about and accept the premium as the cost of insurance rather than trading it actively.

Long Put FAQs

How do you calculate profit on a long put?: At expiration, profit equals the strike minus the stock price, minus the premium paid, multiplied by 100 per contract. If the stock finishes at or above the strike the put is worthless and the loss is the full premium. For a $100 put bought at $3.80 with the stock at $90, the profit is ($100 minus $90 minus $3.80) times 100, or $620.
What is the breakeven on a put option?: Breakeven is the strike price minus the premium paid. A $100 put bought for $3.80 breaks even at $96.20 at expiration. Before expiration the option retains time value, so it can be sold for a profit above that level if the stock drops quickly.
What is the maximum profit on a long put?: Maximum profit is reached if the stock falls to zero and equals the strike price minus the premium, multiplied by 100. A $100 put bought for $3.80 has a theoretical maximum of $9,620 per contract.
Is buying a put better than shorting a stock?: A long put caps the loss at the premium, needs no stock borrow and has no margin call risk, while a short stock position has unlimited loss if the shares rally. The trade-off is that the put expires, so you pay for time and must be right on timing as well as direction.
What happens if my put option expires in the money?: Brokers automatically exercise puts that are in the money by $0.01 or more at expiration. If you own the shares, they are sold at the strike. If you do not, you end up short 100 shares per contract, which requires margin and exposes you to a rally. Sell the put before the close on expiration day if you do not want that outcome.
Do put options go up when the market goes down?: Generally yes. A put gains intrinsic value as the stock falls, and market declines usually push implied volatility higher, which adds to the premium. The exception is a slow grind lower where time decay outpaces the small gains from delta, so the put can lose value even as the stock drifts down.

Related Strategies

Long Call Bear Put Spread Cash-Secured Put

What Is a Long Put?

Long Put Example

Stock at expiration	Result
$105 (or anything at or above $100)	The put expires worthless. You lose the full $380 premium, the maximum loss.
$96.20	Breakeven. The put is worth $3.80 of intrinsic value, matching what you paid. P&L is $0.
$90	The put is $10.00 in the money and worth $1,000. Minus the $380 debit, profit is $620.
$80	The put is worth $2,000. Minus the $380 debit, profit is $1,620.

When to Use a Long Put

You expect a sharp decline in the stock within a specific period, such as into an earnings report or after a technical breakdown.

Implied volatility is low relative to its recent range, so puts are cheap and a spike in fear would inflate their value.

You want to hedge a long stock position against a drawdown without selling the shares, often called a protective put.

You want bearish exposure without the borrow costs, margin requirements or unlimited risk of shorting the stock outright.

Typical directional entries use 45 to 90 days to expiration and a strike at or slightly in the money, around 40 to 60 delta, so the option responds meaningfully to the move you expect.

Risks to Understand

Time decay erodes the premium every day the stock does not fall, and the erosion accelerates inside the final month.

Stocks tend to drift higher over long periods, so a bearish thesis has to overcome both time decay and the market's upward bias.

If the decline you expected arrives after expiration, the option expires worthless even though the thesis was correct. Timing is as important as direction.

Implied volatility is often already elevated when a stock looks weak, so you may be paying a high price for the put.

Far out-of-the-money puts are cheap but have a low probability of finishing in the money, and their bid-ask spreads are proportionally wide.

Managing the Trade

Set a profit target and a stop before entering. A common approach is to take profit at 50 to 100 percent of the premium and exit if the put loses half its value.

After a sharp drop, consider selling a lower strike put against the position to create a bear put spread. This locks in part of the gain and offsets further time decay.

If the stock is falling slowly and the thesis holds, roll to a later expiration before the last 30 days rather than letting the option decay to zero.

Watch implied volatility. If a sell-off has pushed volatility to extremes, taking profit before it retreats can add to the return.

For a protective put on owned shares, choose an expiration that covers the event you are worried about and accept the premium as the cost of insurance rather than trading it actively.

Long Put FAQs

How do you calculate profit on a long put?

At expiration, profit equals the strike minus the stock price, minus the premium paid, multiplied by 100 per contract. If the stock finishes at or above the strike the put is worthless and the loss is the full premium. For a $100 put bought at $3.80 with the stock at $90, the profit is ($100 minus $90 minus $3.80) times 100, or $620.

What is the breakeven on a put option?

Breakeven is the strike price minus the premium paid. A $100 put bought for $3.80 breaks even at $96.20 at expiration. Before expiration the option retains time value, so it can be sold for a profit above that level if the stock drops quickly.

What is the maximum profit on a long put?

Maximum profit is reached if the stock falls to zero and equals the strike price minus the premium, multiplied by 100. A $100 put bought for $3.80 has a theoretical maximum of $9,620 per contract.

Is buying a put better than shorting a stock?

A long put caps the loss at the premium, needs no stock borrow and has no margin call risk, while a short stock position has unlimited loss if the shares rally. The trade-off is that the put expires, so you pay for time and must be right on timing as well as direction.

What happens if my put option expires in the money?

Brokers automatically exercise puts that are in the money by $0.01 or more at expiration. If you own the shares, they are sold at the strike. If you do not, you end up short 100 shares per contract, which requires margin and exposes you to a rally. Sell the put before the close on expiration day if you do not want that outcome.

Do put options go up when the market goes down?

Generally yes. A put gains intrinsic value as the stock falls, and market declines usually push implied volatility higher, which adds to the premium. The exception is a slow grind lower where time decay outpaces the small gains from delta, so the put can lose value even as the stock drifts down.