Bearish
Long Put
Profit from a fall, with capped risk.
Buying a put gives you the right to sell at the strike. It gains as the price drops, with loss limited to the premium. Great as a directional bearish play or as insurance on shares you own.
Construction
Buy 1 put.
Max profit
Strike − premium (at price 0)
Max loss
Premium paid
Breakeven
Strike − premium
Play with the payoff
Bearish
At expiryToday (30d, 30% IV)
Max profit
$95.00
Max loss
−$5.00
Breakeven
$95.00
Best when
- You expect the price to fall
- You want to hedge a long stock position
- You want limited, defined risk