Protective Put Calculator
Calculate the cost of protection, breakeven, and max loss for a protective put strategy. Enter your stock price, put strike, and premium to see your downside insurance at expiration.
Enter your stock price, put strike, and premium, then click Calculate to see your protective put breakeven, max loss, and protection level.
For educational purposes only. Not financial advice. Read full disclaimer
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Protective Put Formulas
Total Cost = (Stock Price x 100 x Contracts) + (Put Premium x 100 x Contracts)
Cost of Protection = Put Premium x 100 x Contracts
Max Loss = (Stock Price - Put Strike + Put Premium) x 100 x Contracts
Breakeven = Stock Price + Put Premium
Protection Level = Put Strike
Max Profit = Unlimited (stock can rise indefinitely)
Worked Examples
Example 1: AAPL Protective Put (OTM)
You own 100 shares of AAPL at $150 and buy a $140 put for $3.00 per share.
- Cost of Protection = $3.00 x 100 = $300
- Total Cost = ($150 x 100) + $300 = $15,300
- Max Loss = ($150 - $140 + $3.00) x 100 = $1,300
- Breakeven = $150 + $3.00 = $153.00
- Protection Level = $140.00
- Max Profit = Unlimited
Example 2: MSFT Protective Put (ATM)
You own 200 shares of MSFT at $400 (2 contracts) and buy $400 puts for $8.00 per share.
- Cost of Protection = $8.00 x 100 x 2 = $1,600
- Total Cost = ($400 x 100 x 2) + $1,600 = $81,600
- Max Loss = ($400 - $400 + $8.00) x 100 x 2 = $1,600 (premium only)
- Breakeven = $400 + $8.00 = $408.00
- Protection Level = $400.00
- Max Profit = Unlimited
How to Use This Calculator
- Enter the stock price — the current price of the shares you own or plan to buy.
- Enter the put strike price — the strike of the protective put you plan to buy. This must be at or below the stock price.
- Enter the put premium — the per-share cost of the put option.
- Enter the number of contracts — each contract covers 100 shares.
- Click Calculate — review your cost of protection, max loss, breakeven, and protection level to evaluate the insurance trade-off.
Frequently Asked Questions
- What is a protective put?
- A protective put (also called a married put) is a strategy where you own stock and buy a put option on the same stock. The put acts as insurance, giving you the right to sell your shares at the put strike price regardless of how far the stock falls. You keep full upside potential minus the premium paid.
- How much does a protective put cost?
- The cost equals the put premium multiplied by 100 shares per contract. For example, a $3.00 put on 1 contract costs $300. This is the price of your downside insurance. Higher implied volatility and longer time to expiration increase the cost.
- What is the difference between a protective put and a stop loss?
- A stop loss is a market order that triggers at a price level and can be executed at a worse price during gaps or fast markets. A protective put guarantees your sell price at the strike, regardless of gaps or market conditions. The tradeoff is that puts cost money while stop losses are free.
- Should I buy an ITM or OTM protective put?
- An at-the-money or slightly out-of-the-money put offers the best balance of cost and protection. Deep OTM puts are cheaper but only protect against large drops. ITM puts offer more protection but cost significantly more, which raises your breakeven and reduces potential profit.
- When does a protective put make sense?
- Protective puts are most useful before earnings, during uncertain market conditions, or when you have large unrealized gains to protect. They are also common for concentrated stock positions where you cannot diversify. Think of it as paying for portfolio insurance over a specific time period.