Buying puts: the payoff

Gaining when a stock falls, and puts as protection.

5 min · Intermediate · Lesson 9 of 17

Step 1 of 4

The payoff at expiration

At expiration, a put is worth the strike minus the stock price, or nothing if the stock is above the strike. Subtract the premium to get the profit or loss.

Put option payoff at expiration

Stock price at expiration

Stock price at expiration: $90Strike price: $100Premium (cost per share): $3

Profit / loss per share: ▲ $7.00
Per contract (×100): $700.00
Break-even: $97.00
Maximum loss: $3.00 / share

For learning only; example numbers, not market prices.

Move the stock price to see how a put responds.

For entertainment and education, not investment advice.