Put Calculator

The Put Option Calculator helps users evaluate potential outcomes and profitability from put option trading by computing maximum profit, maximum loss, break-even point, return on investment, and current profit/loss based on user inputs.

Use Our Put Calculator

How to Use the Put Option Calculator

This guide will walk you through using the Put Option Calculator to evaluate potential trades. Follow the steps carefully to ensure accurate calculations.

Step 1: Enter Stock Details

Start by entering the current stock price. This is the market price of the stock you are considering for the put option. Make sure to enter a value greater than or equal to $0.01. For example, if the current stock price is $50.25, enter “50.25”.

Step 2: Enter Option Details

  • Strike Price: Enter the strike price of the put option. The strike price is the predefined price at which you have the right to sell the stock. Ensure this value is more than or equal to $0.01.
  • Put Premium: Input the premium of the put option. This is the amount you pay for the option and should be at least $0.01.
  • Number of Contracts: Specify the number of contracts being traded. One contract typically equates to 100 shares. Enter a whole number, with a minimum of 1.

Step 3: Review Calculated Results

Once all input fields are filled, the calculator will automatically compute the following:

  • Maximum Profit: This is the total premium received, calculated as put premium multiplied by 100 and then by the number of contracts.
  • Maximum Loss: This represents the maximum loss potential, calculated by subtracting the total premium from the potential loss at the strike price.
  • Break-Even Point: This marks the price at which you neither profit nor lose money, calculated by subtracting the premium from the strike price.
  • Return on Investment (%): The ratio of the premium to the strike price, expressed as a percentage, indicating potential profitability.
  • Current Profit/Loss: This reflects the profit or loss based on the current stock price, strike price, and premium.

Each result will be formatted in currency or percentage as appropriate.

Step 4: Interpret the Results

Utilize the calculated values to make informed trading decisions. Consider factors like maximum loss, break-even points, and current profit/loss to evaluate the potential success and risks of your put option strategy.