Long Put option strategy
Buying 'Put option' is the most basic & simplest strategy. It is recommended when your outlook on the underlying asset is negative & you expect the underlying asset price to fall.
Payoff at expiry
Nifty, lot size 65 · Nifty future 22,946 · 19 Oct 2026Legs
| Action | Option | Strike | Lots | Qty | Premium |
|---|---|---|---|---|---|
| BUY | ATM Put | 22,950 | 1 | 65 | ₹106.30 |
How it works
- Buy 1 ATM put at the 22,950 strike for ₹106.30, paying the premium.
- You pay a net ₹6,910 upfront for the position. This is the most you can lose.
Below 22,844 you profit, and profit grows as Nifty falls.
Above 22,844 you lose, up to ₹6,910.
Set-up: Buy 1 lot ATM Put.
What happens if Nifty moves
Profit or loss at expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 21,550 | −6% | +₹84,091 |
| 22,250 | −3% | +₹38,591 |
| 22,700 | −1% | +₹9,341 |
| 22,950 | Unchanged | −₹6,910 |
| 23,200 | +1% | −₹6,910 |
| 23,650 | +3% | −₹6,910 |
| 24,300 | +6% | −₹6,910 |
How the Greeks affect it
When to use
When you expect a fall in the underlying asset price.
- Unlimited profit potential with capped risk.
- Possibility of greater leverage than selling naked future.
Things to watch
- 100% potential loss of premium in case of inappropriate strike, choice of stock, time decay.
- Greater leverage could prove detrimental in case the expected outlook fails.
Long Put: questions
What is a Long Put strategy?
Buying 'Put option' is the most basic & simplest strategy. It is recommended when your outlook on the underlying asset is negative & you expect the underlying asset price to fall.
When should you use a Long Put?
When you expect a fall in the underlying asset price.
How do you set up a Long Put?
Buy 1 lot ATM Put.
What is the maximum profit of a Long Put?
Maximum reward remains uncapped.
What is the maximum loss of a Long Put?
Since it is a net debit trade you pay for buying the Put option upfront i.e. Premium. Your maximum risk is capped.
What is the breakeven of a Long Put?
With Nifty at 22,946, the example on this page breaks even at 22,844 at expiry.