Long put strategy

The long put is the most direct bearish options strategy. You buy a put option for the right to profit if the stock falls below your strike price before expiration. Like the long call, your maximum loss is capped at the premium paid, making it a defined-risk trade regardless of how far the stock rises.

Bias: Bearish Risk profile: Defined (premium paid) Ideal conditions: Bearish conviction, low IV rank, hedging an existing long position

How it's constructed

• Buy 1 put option at your chosen strike and expiration
• Pay premium upfront
• Profit if the stock falls below your strike − premium paid by expiration

Setup example

NVDA is at $120 and you expect a pullback. You buy the $110 put expiring in 45 days for $3.00.

• Premium paid: $300 per contract
• Breakeven at expiry: $110 − $3.00 = $107
• If NVDA drops to $90: profit = ($110 − $90 − $3) × 100 = $1,700
• If NVDA stays above $110: put expires worthless, loss = $300

Max profit, max loss, breakeven

When to use a long put

Best conditions:

• Bearish conviction on a specific stock, technical breakdown, fundamental deterioration, or negative catalyst expected
• Low IV rank, puts are cheaper, better risk/reward for buyers
• You want to hedge a long position without selling your shares (protective put)
• You expect a meaningful and relatively fast decline

Avoid when:

• IV rank is high, puts are expensive. IV crush risk can offset the gain from a downward move
• The stock is in a stable uptrend with no catalyst for a reversal
• You're only mildly bearish, theta will erode the position without a significant move

Long put as a hedge

One of the most valuable uses of long puts is portfolio protection. If you own shares of a stock but want downside protection, for an earnings event, macro uncertainty, or extended vacation from the screen, buying a put provides a floor.

Example: You own 100 shares of AAPL at $185. You buy the $175 put for $2.00. If AAPL drops to $155, your shares lose $3,000 but your put gains approximately $2,000, partially offsetting the loss. The $200 cost of the put is your insurance premium.

Long put vs short selling stock

The long put has a significant advantage over shorting stock: your downside is strictly limited to the premium paid, regardless of how far the stock rises.

Related terms: Put option, strike price, premium, delta, protective put, IV rank, theta

Try it on Stryke: Find bearish setups and screen for low IV rank tickers in the Options Screener.