Protective Put Payoff Calculator
A protective put is portfolio insurance: you hold the stock and buy a put to floor your downside. This calculator shows the maximum loss, the breakeven price and the profit or loss at any expiration price. Enter your purchase price, the put strike, the premium paid and the number of shares to see exactly how much protection the put buys and what it costs.
Protective put payoff formula
Stock P/L = (price - purchase price) * shares
Put payoff = max(0, put strike - price) * shares
Premium cost = premium * shares
Total P/L = Stock P/L + Put payoff - Premium cost
Max loss = (purchase price - put strike + premium) * shares
Breakeven = purchase price + premium
Below the put strike, every dollar lost on the stock is recovered by the put, so total loss is capped. Above the strike the put expires worthless and you keep the stock gain minus the premium.
Worked example
Buy at $100, put strike $95 for $3, 100 shares. If the stock falls to $90: stock P/L = (90 - 100) * 100 = -$1,000; put payoff = (95 - 90) * 100 = $500; premium cost = $300. Total P/L = -1,000 + 500 - 300 = -$800.00. This equals the maximum loss: (100 - 95 + 3) * 100 = $800.00. Breakeven = 100 + 3 = $103.00. Total premium cost = $300.00.
Protective put: frequently asked questions
What is a protective put?
A protective put pairs a long stock position with a long put option on the same stock, like insurance. You pay the put premium up front. If the stock falls below the put strike, the put gains value and offsets the stock loss, putting a floor under your position. Upside is unlimited, minus the premium paid.
What is the maximum loss on a protective put?
Maximum loss = (purchase price - put strike + premium paid) * shares. Below the put strike the stock loss is matched by the put's gain, so the loss stops growing. The premium is a sunk cost that adds to the maximum loss.
What is the breakeven of a protective put?
Breakeven is the stock purchase price plus the put premium paid per share. The stock must rise by at least the premium before the overall position is profitable, because the premium is an upfront cost.
Sources and method
- U.S. Securities and Exchange Commission investor education on options: Investor.gov: Options.
- Options Clearing Corporation: theocc.com.
- Payoff is the standard sum of stock and long put expiration values minus the premium; no proprietary data is used.
Reviewed by the CalculatorHub team, edited by James Graham, 19 June 2026. See our methodology.