Strategy guide
Long put profit calculator guide
A long put buys downside exposure or hedge-like protection with defined risk equal to the premium paid.
Formula focus
Example: buy one 95 put for $2.50. Breakeven is $92.50. If the stock is $88 at expiration, intrinsic value is $7.00, so estimated P/L is $450 before costs.
Practical limitations
The clean formula assumes a target price at expiration. Real fills, spreads, early assignment, exercise decisions, implied volatility, and time remaining can all change the actual outcome.
Use the calculator
Open the calculator and compare at least three target prices: bearish, base case, and bullish. If one adverse scenario is unacceptable, the trade may be too large or poorly structured.
Primary reading: OIC Profit and Loss Simulator · FINRA options overview · SEC Investor Bulletin on options · OIC options pricing overview