Long Put Calculator
A long put gives you the right to sell 100 shares of the underlying stock at the strike price before expiration. You pay a premium upfront and profit when the stock falls below your break-even price.
Price it
Practical example
When to use it
- You are directionally bearish and want leverage with risk hard-capped at the premium paid
- You're hedging a long stock or portfolio position — puts are portfolio insurance
- Implied volatility is low relative to your expected move (you'd rather buy vol than sell it)
- You don't want the unlimited risk, margin, and borrow costs of short selling
Risks
- Time decay works against you — a stagnant stock bleeds premium daily
- If the stock doesn't clear break-even to the downside, you lose the full premium
- Put skew makes OTM puts structurally expensive — you often pay a vol premium for downside protection
- IV crush after a feared event that didn't happen (macro de-risking, earnings) can destroy value even if the stock drifts lower
The deeper breakdown
How a Long Put Works
A long put is the right — not the obligation — to sell 100 shares at the strike price before expiration. It's the cleanest defined-risk way to express a bearish view, and the most common hedging instrument for long stock portfolios.
Example
AAPL at $195. Buy the $190 put (30 DTE) for $4.00 per share ($400 total).
Long Put vs. Short Selling
Short selling carries unlimited risk, requires a locate/borrow, and can be squeezed. A long put caps max loss at the premium, has no borrow cost, and exposure can be sized precisely by strike selection.
Put Skew
Equity index and single-stock puts almost always carry higher implied volatility than equidistant calls — this is "put skew". It means you pay a structural vol premium for downside protection. Skew steepens in fear regimes (VIX spikes), which is also when hedges matter most.
Key Takeaway
Long puts are a leveraged, defined-risk bearish bet — or a hedge. Best initiated when IV is subdued and skew isn't extreme; worst when IV is elevated from fear and a vol collapse is imminent.
Calculations are theoretical projections from standard pricing models (Black-Scholes), not predictions. Real fills, slippage, dividends, and volatility shifts will cause outcomes to differ. Not investment advice. Full disclaimer.