Long Put options strategy
A long put gains as the underlying falls below the strike. It can express a bearish view or protect an existing holding.
- Market outlook
- Bearish
- Construction
- Buy one put option.
- Maximum risk
- Premium paid.
- Maximum reward
- Substantial but capped when the underlying reaches zero.
- Breakeven at expiry
- Strike minus premium at expiry.
Strategy questions
- What is a Long Put?
- A long put gains as the underlying falls below the strike. It can express a bearish view or protect an existing holding.
- What is the maximum risk of a Long Put?
- Premium paid.
Risk note
Options are leveraged and expire. Model payoff at multiple prices and volatility levels in the Options Strategy Lab before considering a position.