Long put
Downside exposure with a floor on the loss — the cleanest way to be short without unlimited risk.
The view: Down, or a hedge against something you own.
Construction
| Leg | Qty | Strike at 100 spot |
|---|---|---|
| Long put | 1 | 100 |
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- Max profit
- +9,731
- Max loss
- -269
- Breakeven
- 97.31
- Net cash
- -269
When it fits
Either an outright bearish view, or insurance on a holding you do not want to sell. As a hedge it is expensive precisely when you most want it, because volatility rises as markets fall.
What goes wrong
- Puts are usually priced above their theoretical value, because everyone wants the same insurance.
- The premium is a certain cost against an uncertain payoff.
- Time decay again — a slow decline can still lose money.
Try it properly
The chart above is the real pricing model, limited to three sliders. To change strikes, add legs, switch to futures, or price it against your own volatility assumption, open it in the options P&L calculator — the link under the chart carries this exact position across.
Education, not advice. Payoffs ignore commission, bid-ask spread, assignment risk and financing.