Put Option Calculator
This calculator models standard put option scenarios: long put (buy), short put (sell), and an estimate of a synthetic put derived from put-call parity. Use the inputs to evaluate payoff at a chosen expiry price, breakeven, net profit/loss, and parity differences.
Designed for scenario analysis and educational insight. Results are deterministic algebraic computations based on your inputs; they do not incorporate real-time market execution, slippage, margin requirements, assignment probability, or tax effects.
Standard long (buy) put position. Buyer pays premium and benefits when underlying falls below strike at expiry.
Inputs
Results
Total premium paid
$250.00
Net cost (including fees)
$251.00
Payoff at expiry (before premium)
$0.00
Net profit at expiry
-$251.00
Breakeven price (per share)
$97.50
| Output | Value | Unit |
|---|---|---|
| Total premium paid | $250.00 | USD |
| Net cost (including fees) | $251.00 | USD |
| Payoff at expiry (before premium) | $0.00 | USD |
| Net profit at expiry | -$251.00 | USD |
| Breakeven price (per share) | $97.50 | USD |
Visualization
Methodology
Payoff calculations compute per-share payoff at expiry then scale by number of contracts and contract size. Premiums are treated on a per-share basis and multiplied by contract quantity.
The synthetic put estimate uses put-call parity: P = C - S + K * e^{-rT}. Present value of strike is calculated with continuous discounting using the provided risk-free rate and time to expiry (days/365).
Data integrity and testing procedures follow best-practice principles for reproducible financial calculators. Development and testing recommendations align with NIST guidance on software testing and verification, ISO software quality management principles, and IEEE recommendations for numerical accuracy validation. Operational safety and workplace processes should follow applicable OSHA guidance where relevant.
Worked examples
Example 1: Long 1 put on 100 shares with strike 100, premium 2.50, fees 1. Payoff at expiry if underlying is 90: (100 - 90) * 100 = 1000; net profit = 1000 - (2.5*100) - 1 = 749.
Example 2: Short 2 puts on 100 shares with strike 50, premium 1.00, fees 2. If underlying is 40 at expiry, seller payoff = -(50 - 40) * 200 = -2000; net profit = (1.00*200 - 2) - 2000 = -1802.
Further resources
Expert Q&A
How accurate are these calculations?
Calculations are algebraic and precise given the supplied inputs. They do not model execution risk, early assignment, margin, or path‑dependent payoffs. For model verification and numeric testing practices, follow NIST and IEEE testing recommendations. Use results as a scenario guide, not trading advice.
Does the tool price options (Black‑Scholes) or compute Greeks?
This tool focuses on payoff, breakeven, and parity comparisons. It does not compute Black‑Scholes theoretical prices or Greeks. Use a dedicated pricing model when you need implied volatility calibration or Greek sensitivities.
What assumptions underlie the synthetic put calculation?
Put-call parity assumes European-style options, frictionless markets, and the ability to borrow/lend at the risk-free rate. The synthetic expression uses continuous discounting of the strike price (K * e^{-rT}). Market realities like dividends, transaction costs, and early exercise for American options can create deviations.
How should I validate results before trading?
Cross-check with a regulated broker or exchange-provided calculators, perform sensitivity checks (vary premium, underlying, T), and document test cases. Follow ISO software quality and NIST recommended testing protocols for reproducibility. Maintain audit trails of input parameters and test results.
Sources & citations
- NIST — National Institute of Standards and Technology — https://www.nist.gov
- ISO — International Organization for Standardization — https://www.iso.org
- IEEE — Institute of Electrical and Electronics Engineers — https://www.ieee.org
- OSHA — Occupational Safety and Health Administration — https://www.osha.gov