⚡ Long Put Playbook
→Buy with 30–45 DTE to reduce theta decay drag
→60–70 delta for a direct downside bet, 20–30 delta for cheap protection
→Consider taking profit at 50–100% gain on a directional bet
→As protective insurance, treat the premium as a cost, not a trade to "win"
→Size directional bets to 1–5% of portfolio; protection sizing follows your shares
→Buy in lower-IV environments when possible — spikes make puts expensive
What Is a Long Put?
A long put is the mirror image of a long call: you pay a premium for the right to sell 100 shares at a fixed strike price before expiration, profiting when the underlying falls. It's used two ways — as a standalone bearish bet, or as protective insurance (a "married put" or "protective put") against a stock position you already own. Either way, your maximum loss is capped at the premium paid, while profit potential extends all the way down to zero on the underlying.
Because a long put is a debit strategy, time works against you: theta decay eats into the premium every day the stock doesn't move in your favor, and like calls, the position is sensitive to implied volatility — a drop in IV lowers the put's value independent of price direction.
Worked Example
Using the calculator's default inputs
SPY trading at $580, buying the $570 put for $4.20 with 45 days to expiration (18% implied volatility):
- Cost to enter: $420 (1 contract × $4.20 × 100 shares)
- Breakeven at expiration: $565.80 ($570 strike − $4.20 premium)
- Max loss: $420 — the entire premium, if SPY closes at or above $570
- Max profit: grows as SPY falls further below breakeven — every $1 SPY trades below $565.80 adds $100 to the position, down to SPY reaching zero
Frequently Asked Questions
How is a long put different from short-selling a stock?
Short selling has theoretically unlimited loss potential and requires margin. A long put caps your maximum loss at the premium paid and requires no margin — you simply risk less to express the same bearish view.
What's a "protective put" and how is it different from a directional bet?
A protective put is a long put bought against shares you already own, acting like insurance that limits downside on your existing position. A directional long put, by contrast, is a standalone bet on a stock falling with no underlying shares involved.
Does a long put lose value even if the stock doesn't move?
Yes — theta decay reduces the option's extrinsic value every day that passes, and the effect accelerates as expiration approaches, regardless of price direction.
How is the breakeven price calculated for a long put?
Breakeven equals the strike price minus the premium paid. The stock needs to close below that level at expiration for the position to be profitable.