Long Put Option Calculator
bearishA 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.
Max Profit
Strike Price − Premium Paid (×100) — if stock goes to $0
Max Loss
Limited to the premium paid
Break Even
Strike Price − Premium Paid
When to Use a Long Put
- You are bearish on the underlying stock
- You want to hedge an existing long stock position
- You expect a significant move lower before expiration
- You want defined risk compared to short selling
Risks
- Time decay (theta) works against you
- If the stock doesn't drop below break-even, you lose your premium
- Stocks tend to go up over time, making puts harder to profit from statistically
How a Long Put Works
Buying a put option gives you the right to sell 100 shares at the strike price before expiration. It's the most straightforward way to bet on a stock declining, with risk limited to the premium you pay.
Example
Say AAPL is trading at $195 and you buy the $190 put expiring in 30 days for $4.00 per share ($400 total).
Long Put vs. Short Selling
Unlike short selling, where losses are theoretically unlimited (the stock can rise forever), a long put caps your maximum loss at the premium paid. This makes puts an attractive alternative for bearish bets.