Long Put
A position created by buying a put option, with loss limited to the premium and gain rising as the underlying falls.
Formula
Profit at expiry = max(Strike - Spot, 0) x Lot Size - Premium Paid x Lot Size; Break-even = Strike - Premium
Unit
₹
In depth
A long put is the bounded alternative to short selling: the maximum loss is the premium rather than an unlimited amount, at the cost of paying for the position and having it expire. It is the standard portfolio hedge, and its cost should be thought of as insurance rather than as a trade — a hedge that expires worthless has done its job, exactly as an unclaimed insurance policy has. Put premiums rise sharply when volatility rises, which means protection is most expensive precisely when it is most wanted. Buying puts continuously as a strategy is a reliable way to lose the premium repeatedly.
Worked example
Buy a 24,000 put at 165, lot 75, cost ₹12,375. Break-even is 23,835. At an expiry of 23,500 the profit is (500 - 165) x 75 = ₹25,125; above 24,000 the loss is the full ₹12,375.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Long Put” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.