|
Options Strategies
|
|
|
Long Put
| Strategies |
Long Put |
| Component |
Buy put |
| Potential Profit |
- When the stock price/index level is below the break-even point
- Limited to break-even point minus stock price/index level
|
| Maximum Loss |
Total premium paid |
| Time Value Impact |
Negative |
| Break-even |
Strike price/level minus premium paid |
Example
| Component |
Buy ABC Mar $200 Put |
| Net Premium |
Pay $20 |
| Break-even |
$200-$20=$180 |
| Profit when |
Stock price is below $180 |
| Potential Profit |
$180 - stock price |
| Potential Loss |
$20 |
| Time Value Impact |
Negative |
Back
|
|
|