Put Option Payoff Calculator
Calculate put option intrinsic value, expiry profit/loss, and downside breakeven price.
How the Calculation Works
Read parameters and compute total exposure: multiply order quantity by contract unit multiplier.
Evaluate terminal return at the selected target price using strict financial mathematical boundary logic.
Deduct upfront capital commitments, taxes, or net debits to produce final net profit or loss realization.
Calculation Formula
- K: Selected Put strike price
- S: Underlying market price at expiration
- P: Option premium paid per unit
- BE: Breakeven price = Strike (K) - Premium (P)
Example Calculation
1 lot (50 units) Nifty 24,500 Put bought at ₹180 premium with Nifty expiring at 24,100.
Intrinsic value is ₹400 per unit. Subtracting ₹180 premium leaves ₹220 net gain per unit (₹11,000 across 50 units).
Assumptions & Parameters
- Payoff evaluates intrinsic expiration settlement; early exercise is not modeled.
- Maximum theoretical profit occurs if the asset drops to absolute zero: (Strike - Premium) × Units.
Frequently Asked Questions
What is a put option payoff?
A put option payoff is the cash value realized at expiration from the contractual right to sell the underlying asset at the strike price.
How is long put profit calculated?
Net profit equals intrinsic expiration value (Strike Price minus Underlying Price, minimum zero) minus the option premium paid, multiplied by total units.
What is the breakeven price for a put option?
The breakeven price equals the Strike Price minus the Premium Paid (K - P). The underlying must decline below this level to yield net profit.
What is the maximum profit for a long put?
Maximum profit is capped at (Strike Price - Premium) × Quantity, which is achieved if the asset price falls to zero.
What is the maximum loss on a long put?
Your maximum risk is strictly limited to the premium paid to buy the contract.
What happens when the underlying finishes above the strike at expiry?
The put option expires Out-of-the-Money (OTM) worthless, resulting in the total loss of the initial premium paid.
What is the difference between intrinsic value and premium?
Intrinsic value is the immediate tangible profit if exercised now. Premium includes both intrinsic value and extrinsic time value.