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Protective Put Cost Calculator

Price the insurance on your stock — the cost of a protective put, your protected floor, maximum loss, and what the coverage costs per year.

Stock price
Put strike (floor)
Put premium (per share)
Shares to protect
Days of coverage
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How it works

Cost = premium × shares · Protected floor = strike − premium · Max loss/share = stock − strike + premium · Annualized cost = cost% × 365 ÷ days

A protective put is portfolio insurance: you own the stock and buy a put, which gives you the right to sell at the strike no matter how far the price falls. Your maximum loss is capped at the distance from your purchase price down to the strike, plus the premium you paid for the put. That premium is the cost of the coverage — like an insurance deductible plus premium — and expressing it as an annualized percentage shows how much steady drag protection adds if you renew it repeatedly.

Worked example

Holding 100 shares at $100, you buy a $95 put for $3 — $300 total, or 3% of the position. Your loss is capped: below $95 you can sell at the strike, so the worst case is $100 − $95 + $3 = $8 per share, an $800 maximum loss. Over 90 days the 3% cost annualizes to about 12.2%.

Frequently asked questions

How much does a protective put cost?

The cost is the put premium times the number of shares. As a percentage of your position it depends on how close the strike is to the current price, how volatile the stock is, and how long the coverage lasts — this calculator shows all three views.

What is my maximum loss with a protective put?

It is fixed: the stock price minus the strike (your uninsured drop) plus the premium you paid. Below the strike the put offsets any further decline, so no matter how far the stock falls you cannot lose more than that.

Is a protective put worth it?

It trades a known, ongoing cost for protection against a large loss. It makes sense when you want to hold a stock through a risky event but cannot afford a deep drawdown; the annualized cost shows how expensive that peace of mind is over time.

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Educational estimate, not investment advice. Options and margin involve substantial risk.