Short Put Calculator
Use this free short put calculator to model your trade before you place it. Enter your strike price and premium received to instantly see max profit, max loss, breakeven, and a full P&L diagram for a short put position.
See whether your short puts are actually profitable over time
You just modeled this short put’s payoff. The free options trading journal template (Excel and Google Sheets) logs every position so you can track your real win rate, average P&L, and trade history by strategy.
- ✓Works with any broker, in Excel or Google Sheets
- ✓Track win rate, average P&L, and trade history by strategy
- ✓Free, no credit card needed
We’ll email you the free template. Unsubscribe anytime.
How to use the short put calculator
Enter your trade details above and the calculator updates your results in real time. Here is what each input does.
Pull current market data (optional)
Type a ticker like AAPL and click Get Price. The calculator fills in the current stock price, dividend yield, and the risk-free rate from the 13-week T-bill, then loads the option chain so you can pick actual strikes and premiums.
Set up your short put
The short put leg is preloaded for you. Pick the strike, expiration, and premium straight from the option chain, or type your own numbers. The calculator works out implied volatility from the premium you enter, and you can still edit it.
Calculate and read the results
Click Calculate P&L to see max profit, max loss, breakeven, return on risk, and probability of profit, plus position Greeks: delta, gamma, theta, vega, and rho.
Stress test before you trade
Drag the view-date slider to see your P&L curve on any day before expiration, shift implied volatility up or down 50 points, and scan the price-by-date P&L table to see how the trade behaves across scenarios.
This short put calculator prices each leg with your choice of an American-style binomial model (the default for US equity options) or European Black-Scholes-Merton, and accounts for dividend yield. You can set a per-contract commission, copy a shareable link to your exact setup, download the chart as a PNG, and switch to dark mode.
Understanding the short put strategy
A short put is a bullish to neutral options strategy where you sell a put option and collect a premium upfront. In exchange for that income, you take on the obligation to buy 100 shares of the underlying stock at the strike price if the buyer exercises. The trade profits when the stock closes above the breakeven price at expiration, letting the option expire worthless while you keep the full premium.
Unlike a short call, the risk on a short put is substantial but defined. Since a stock can only fall to zero, the worst-case loss is the strike price minus the premium received — a large number, but a known one. This makes the short put a more common strategy among retail traders compared to the naked call.
When to use a short put
Short puts work best when you have a bullish to neutral view on a stock and want to collect premium income. They are especially effective when implied volatility is elevated, since higher IV inflates the premium you collect. A common use case is selling a put below a stock’s current price at a level where you would be happy to own the shares — effectively getting paid to wait for a stock to come to you at your target price.
Assignment risk
If the stock closes below your strike price at expiration, you may be assigned and forced to buy 100 shares at the strike price. This is not always a bad outcome — if you sold the put at a price where you wanted to buy the stock anyway, assignment simply means you acquired the shares at a discount (your effective cost basis is the strike minus the premium received). If you do not want to own the shares, close the position before expiration.
Short put vs. cash-secured put
A short put and a cash-secured put are mechanically the same trade. The difference is in how the position is margined. A cash-secured put requires you to hold the full cash value of the potential stock purchase in your account. A naked short put uses margin instead. Both have identical P&L profiles and breakeven calculations — the distinction is purely about account requirements and capital usage.
Short put example with real numbers
Here is a worked example you can enter directly into the calculator above to see the full P&L diagram in action.
Trade setup: XYZ stock trading at $50.00, selling an OTM put
Common short put mistakes to avoid
Selling a put looks simple: collect the premium and wait. But getting the strike, timing, or position size wrong can turn a routine income trade into a forced stock purchase at a bad price. These are the errors that show up most often.
1. Selling a put on a stock you would not actually want to own
A short put means you may be forced to buy 100 shares per contract at the strike price. If the trade only makes sense as a bet on a stock you would not want in your portfolio, the premium collected is not enough compensation. Only sell puts on stocks you would be comfortable holding at that price.
2. Underestimating how large max loss can get
Max loss on a short put is the strike price times 100 per contract, minus the premium received, and it applies all the way down to a stock price of zero. It is not “unlimited” the way a short call’s risk is, but it is still large relative to the credit collected. Check the max loss figure in the calculator above before sizing the position.
3. Selling when implied volatility is already low
The premium on a short put is compensation for taking on downside risk, and that premium shrinks when volatility is low. Selling into a quiet market means accepting the same risk of assignment for a thinner credit, with less room to benefit if volatility rises later. A short put generally sells for more when volatility is closer to its recent highs than its lows.
4. Ignoring assignment risk near expiration
As a short put moves in the money and time value decays, assignment becomes more likely, especially in the final days before expiration. If you are not prepared to buy the shares, or do not have the cash or margin available to do so, decide whether to close or roll the position before expiration rather than after you are assigned.
5. Not sizing the position for full assignment
A short put obligates you to buy the full 100 shares per contract if assigned, not a partial position. Selling more contracts than you could actually afford to take assignment on, whether cash-secured or on margin, can force an account into a sale it did not plan for. Size the position against the full assignment cost, not just the margin requirement.
6. Choosing a naked short put when a defined-risk spread fits the view better
A short put’s downside runs all the way to a stock price of zero, which is a lot of risk to carry for a view that is closer to “the stock probably will not fall much” than “I want to own the stock at a discount.” If the goal is income without taking on that much downside, the bull put spread calculator caps the max loss at the width between strikes, at the cost of a smaller credit. Match the structure to how much of that downside you actually want to hold.
Explore other options strategy calculators
Each strategy has its own dedicated calculator with a full P&L breakdown, worked example, and FAQ.
Free trading journal
Track whether your short puts are consistently profitable
You just modeled your short put payoff. The real test is whether the strategy makes money across dozens of trades. Enter your email to get the free options trading journal template (Excel and Google Sheets).
- Free trading journal template (Excel and Google Sheets)
- Track win rate, average P&L, and trade history by strategy
- Works with any broker. No app required.
Short put options: frequently asked questions
A short put is an options strategy where you sell a put option and collect a premium upfront. You take on the obligation to buy 100 shares of the underlying stock at the strike price if the buyer exercises. The trade profits when the stock stays above the breakeven price at expiration, causing the option to expire worthless and letting you keep the full premium. Unlike a short call, the maximum loss on a short put is substantial but defined, since a stock can only fall to zero.
The maximum profit on a short put is the premium received when you sold the option, multiplied by 100 shares per contract. This occurs when the stock closes at or above the strike price at expiration, causing the put to expire worthless. You keep the entire credit regardless of how high the stock climbs above the strike. For example, if you sold a put for $1.50 per share, your maximum profit is $150 per contract.
The maximum loss on a short put is the strike price minus the premium received, multiplied by 100, which occurs if the stock falls to zero. For example, selling a $45 put for $1.50 gives a maximum loss of ($45 minus $1.50) times 100, or $4,350 per contract. While substantial, this loss is defined — unlike a short call whose losses are theoretically unlimited. In practice, most traders close losing short put positions well before expiration to limit drawdown.
The breakeven price for a short put is the strike price minus the premium received. For example, if you sell a $45 strike put and collect $1.50 in premium, your breakeven is $43.50. At expiration, the stock must close above $43.50 for the trade to be profitable. Between $45.00 and $43.50, you have a partial loss as the put gains intrinsic value against your collected premium. Below $43.50, every dollar the stock falls is a dollar of net loss on the position.
A short put and a cash-secured put are mechanically identical — both involve selling a put option and collecting premium. The difference is in margin and intent. A cash-secured put requires you to hold enough cash to buy the shares at the strike price if assigned, making it a conservative strategy often used to acquire stock at a target price. A naked short put uses margin instead of reserved cash. Both have the same P&L profile and breakeven calculation — the distinction is purely about account requirements and capital usage.