Protective Put Calculator
A protective put puts a hard floor under shares you already own, at the cost of the premium. Below the strike your losses stop; above it you keep the upside minus what the insurance cost. Enter your share cost, strike and premium to see both.
The arithmetic
The default is 100 shares at $100 plus one $95 put bought for $2.20.
- Floor = strike, $95. Below that the put gains a dollar for every dollar the shares lose, so the combined position stops falling.
- Max loss = (share cost − strike + premium) × 100 = $720. That is the entire downside, no matter how far the stock drops.
- Breakeven = share cost + premium = $102.20. The shares must rise by the cost of the insurance before you are level.
- Upside = unlimited, less the $2.20 premium.
This is the one options position that is genuinely conservative
Most "safe" options strategies are long stock with a trim. A protective put actually removes the tail: the chart goes flat at $95 and stays flat all the way to zero. That is worth saying plainly, because it is unusual.
What you pay for it is visible in the chart as the whole line shifting down by the premium. Insurance is not free, and on a volatile underlying it is not cheap — a put costing 2.2% of the share price for a month is roughly 26% a year if you hold it continuously, which is more than most equities return. Protective puts are a tool for a specific window of risk (an earnings print, a binary event, a position you cannot sell for tax reasons), not a permanent overlay.
Choosing the strike is choosing your deductible
A higher strike floors you closer to today's price and costs more. A lower strike is cheaper and lets more of the decline through before protection starts. It is exactly the deductible trade-off on any insurance policy: how much of the first loss are you willing to absorb yourself? Type a few strikes and premiums from your own chain into this page and read the max-loss figure each time — that number is your deductible.
The cheaper variant
If the premium looks steep, selling an upside call to fund it turns the position into a collar: the floor stays, the cost drops toward zero, and you give up the gains above the call strike. That is the trade most long-term holders end up making.
Where the 100x multiplier comes from
Product specification, not convention: OCC defines a standard equity option as covering 100 shares, premium quoted in points where one point is $100[1] — so a $1.85 premium costs $185, and every payoff here applies that multiplier to the leg structure.
One exception is worth knowing about: adjusted contracts, covered on the options profit calculator.
Calculating it is the easy half
Hedge maths is a subtraction. The payoff is arithmetic — anyone can run it. What it cannot show is whether you believed the trade when you put it on, or are describing a winner picked out of a month of noise.
That is the gap kappi closes: the position committed before the fact, sealed and timestamped on a log nobody can edit afterwards. A screenshot of this chart proves you can use a calculator; a sealed commit proves you took the trade. $15/month, no free tier.
Sources
Frequently asked questions
What is the maximum loss with a protective put?
Your share cost minus the put strike, plus the premium paid, times 100 per contract. That figure holds no matter how far the stock falls.
What is the breakeven on a protective put?
Your share purchase price plus the premium paid. The shares have to rise by the cost of the hedge before the combined position is level.
Is a protective put worth the cost?
For a defined window of risk, often yes. Held permanently it is expensive — a monthly put at ~2% of share price is a large annual drag. Most holders use it around specific events.
How do I make a protective put cheaper?
Sell an out-of-the-money call against it to fund the premium. That converts the position into a collar and caps your upside at the call strike.