The put profit formula
A long put gives you the right to sell 100 shares at the strike price. At expiration there is no time value left, so the put is worth exactly its intrinsic value: the strike minus the stock price, floored at zero. Subtract the premium you paid and you have your profit or loss per share. Multiply by 100 shares per contract and by your contract count for the total.
In symbols: profit per share = max(0, K - S) - premium, where K is the strike and S is the stock price at expiry. Total P/L = profit per share x 100 x contracts. That is the entire formula. Everything below is that formula with real numbers plugged in.
Worked example: a $100 strike put on XYZ
XYZ trades at $102. You buy 2 contracts of the $100 strike put for $3.50 per share. The put is out of the money, so the full $3.50 is time value. Three numbers fall out immediately:
Cost (maximum loss): $3.50 x 100 shares x 2 contracts = $700. This is the most you can ever lose. If XYZ finishes at or above $100, the put expires worthless and the $700 is gone, but the loss stops there.
Breakeven: $100 - $3.50 = $96.50. At $96.50 the put is worth $3.50 at expiry, exactly what you paid, so you break even.
Maximum profit: if XYZ goes to $0, the put is worth $100 - $0 = $100 per share. Minus the $3.50 premium, that is $96.50 per share x 200 shares = $19,300. Puts have capped profit (the stock cannot go below zero) but the cap is generous.
Profit at different expiry prices
Here is the full payoff picture for those 2 contracts, so you can see how the formula behaves across scenarios:
| XYZ at expiry | Put value/share | Profit/share | Total P/L |
|---|---|---|---|
| $100 | $0.00 | -$3.50 | -$700 |
| $96.50 | $3.50 | $0.00 | $0 |
| $90 | $10.00 | +$6.50 | +$1,300 |
| $80 | $20.00 | +$16.50 | +$3,300 |
Check the $90 row: the put is worth $100 - $90 = $10.00, minus the $3.50 premium = $6.50 per share, times 200 shares = $1,300 profit. The $80 row: $20.00 - $3.50 = $16.50 per share, times 200 = $3,300. Every row is the same formula, and the breakeven row confirms $96.50 exactly.
Why the maximum loss is capped
The worst case for a put buyer is the option expiring worthless, which happens whenever the stock finishes at or above the strike. You lose the premium and nothing more. Compare that with shorting 200 shares of XYZ at $102: if the stock rallies to $110, the short loses ($110 - $102) x 200 = $1,600, and there is no ceiling if it keeps climbing. The put buyer pays $3.50 a share for a hard cap on the downside; the short seller gets no such cap. That asymmetry is the entire reason puts exist as insurance.
Intrinsic value versus time value, with numbers
At purchase, with XYZ at $102, the $100 put is out of the money: intrinsic value $0, so the entire $3.50 premium is time value. Fast-forward two weeks: XYZ is at $97 with a month left to expiry, and the put trades at $4.40. Its intrinsic value is now $100 - $97 = $3.00, so the remaining $1.40 is time value.
Your unrealized gain is $4.40 - $3.50 = $0.90 per share, or $180 on 2 contracts. But the at-expiry table says XYZ at $97 is a $100 loss: ($3.00 - $3.50) x 200 = -$100. The $280 gap between those two numbers is the time value still embedded in the option. This is the key limitation of expiry math: it understates what the position is worth before expiration, and it is exactly why the homepage calculator labels its results "at expiry."
When this math applies, and when it does not
These formulas describe profit at expiration. Before expiration the put also carries time value, so its market price will be higher than the intrinsic value shown here. If you sell early, your P/L follows the market price, not this table. The calculator on our homepage uses this same at-expiry math: enter your strike, premium, contracts, and an assumed expiry price to see the payoff curve instantly.