Buy a put
beginnerbearishStrategy parameters
Greeks (current)
Delta
-46.573
Gamma
4.621
Theta
-5.083
Vega
11.395
Rho
-4.094
Payoff diagram
P&L at expiryP&L today (theoretical)Current spot
Key metrics
Net cost
$324.24
Debit (paid)
Max profit
$9,675.76
Max loss
-$324.24
Breakevens
$96.76
Scenarios at expiry
| Move | Spot | P&L at expiry | % of cost |
|---|---|---|---|
| -20% | $80.00 | $1,675.76 | 516.8% |
| -10% | $90.00 | $675.76 | 208.4% |
| -5% | $95.00 | $175.76 | 54.2% |
| +0% | $100.00 | -$324.24 | -100.0% |
| +5% | $105.00 | -$324.24 | -100.0% |
| +10% | $110.00 | -$324.24 | -100.0% |
| +20% | $120.00 | -$324.24 | -100.0% |
Mechanics & risks
How it works
A put option gives you the right to sell 100 shares at a fixed strike price. You pay a premium. Profit grows as the stock falls below the strike.
When to use
You expect a sharp decline, or want insurance on shares you already own (protective put).
Risks
- Maximum loss = premium paid if the option expires worthless.
- Time decay works against you.
- Stock must drop enough to overcome the premium before expiry.