Protective Put Calculator

Estimate what a put hedge costs, how many shares it actually protects, the downside floor it creates at expiration, and how the hedged position behaves across several stock-price scenarios.

Position and option inputs

Enter the shares in the stock or ETF position you want to protect.
This is the current mark used for the calculator's forward-looking profit-and-loss comparison.
Equity-option premiums are quoted per share. The total cash cost also depends on contracts and shares per contract.
100 is standard for most equity and ETF options. Adjusted contracts can represent a different number of shares after some corporate actions.

Protection summary

$300Total premium paid
100%Shares protected by the puts
$9,000Gross expiration floor at a zero stock price
$1,300Worst-case loss from current mark plus premium
3%Premium as a share of current stock value
$103.00Expiration break-even if the put expires worthless

The entered puts cover all entered shares. This is expiration payoff math, not a recommendation to buy the put or hold it to expiration.

What happens at expiration?

The table compares the stock alone with the stock-plus-put position from today's entered stock price. Put premium is treated as a cash cost paid now. Dividends, taxes, commissions, early exercise, volatility changes, and any sale of the put before expiration are outside this calculation.

Stock at expirationStock-only P&LPut payoffHedged P&L after premium
$0.00-$10,000$9,000-$1,300
$90.00-$1,000$0-$1,300
$100.00$0$0-$300
$120.00$2,000$0$1,700

The floor is not free

For a fully covered position, the protective put establishes a strike-based sale right through expiration. The premium raises the effective downside cost and also raises the stock price needed to break even if the put expires worthless. The Options Industry Council summarizes maximum loss for a standard protective put as stock purchase price minus strike price plus premium paid.

Premium cost = contracts × shares per contract × premium per share
Coverage = option shares ÷ shares owned
Gross floor at a zero stock price = protected shares × strike price
Worst-case loss from current mark = current stock value + premium cost − gross floor

That last line intentionally uses the current entered stock price, not your historical tax basis. It answers a forward-looking risk question from today's mark. Your realized tax result can be very different.

Where the calculator stops

This tool does not decide whether protection is worth its cost, choose an expiration date or strike, model implied volatility, estimate taxes, or account for bid-ask spreads and early exits. It also rejects option coverage above the entered share count because excess puts would create a separate long-put position rather than hedge the shares entered here.

Use the portfolio hedging guide for the broader risk decision, the futures hedge calculator for beta-adjusted index-futures sizing, and the taxable-position hedging guide for implementation and tax considerations.

Method and contract-size sources