Protective Put Calculator
A protective put (also called a married put) is owning the stock and buying a put against it as insurance. The put sets a floor under your losses below its strike, while your upside stays unlimited. The cost is the premium — a small, known price for downside protection.
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Key characteristics
- Long stock + long put: the put is a price floor, the stock keeps the upside.
- Max loss is limited to (stock price − put strike) + the premium paid.
- Breakeven = stock purchase price + the put premium.
- Best when you are bullish but want to cap the downside through a risky event.
When to use a protective put
Use a protective put when you want to stay long a stock you believe in but cannot afford a large drawdown — for example heading into earnings, a product launch, or simply a nervous market. It is portfolio insurance: you keep every cent of upside and cap the downside at a strike you choose.
A higher strike costs more but protects sooner; a lower strike is cheaper but lets the stock fall further before the floor kicks in. Match the strike to how much loss you are willing to absorb.
The cost and the trade-off
Like any insurance, the premium is a drag if nothing bad happens — the stock has to rise by at least the premium before you break even. Over many calm periods those premiums add up, which is why some traders only buy puts around known risk events rather than continuously.
A protective put is the opposite trade to a covered call: the covered call sells the upside for income, while the protective put pays to insure the downside.
Calculate it live
Use the free OptionProfit Protective Put calculator to load a live option chain, build the trade, and instantly see the payoff chart, breakevens, probability of profit, Greeks and a Monte Carlo simulation of outcomes.
- Owning stock + a long put = a floor under losses with unlimited upside.
- Max loss = (entry − put strike) + premium; breakeven = entry + premium.
- It is downside insurance — the premium is the cost of that protection.
- The mirror image of a covered call (which sells upside instead of insuring downside).
Frequently asked questions
What is the difference between a protective put and a married put?
They are the same strategy. "Married put" usually means you buy the stock and the put at the same time; "protective put" often means you add the put to stock you already own. The payoff is identical.
How much does a protective put cost?
Only the put premium. That premium is your maximum extra cost and the amount by which it raises your breakeven — the price of insuring the downside.
Which strike should I choose?
A higher strike protects sooner but costs more; a lower strike is cheaper but absorbs more loss before it helps. Pick the strike at the maximum loss you are willing to take.
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