Long Put
Buying a put option (also known as a “long put”) is a bearish strategy that is typically used in anticipation of a decline in the underlying asset. The goal of a long put is for the spot price of the underlying asset to fall below the strike price upon expiration.

Long puts are ideal for users who have a bearish market view and would like to short the underlying asset. Similar to a short position, the value of a long put would increase as the price of the underlying asset decreases. However, unlike a short position, the risk of a long put is limited to the premiums paid for the option.
A long put could also be used to hedge a user’s positions in the underlying asset by offsetting downside losses.
Thetanuts runs 6-10 delta weekly strategies for ETH and BTC based on prevailing market rates with reference to Deribit.
For all other tokens, Thetanuts sets the strike at 20% below spot for bi-weeklies. If the yields are too low, for instance in a period of low volatility, Thetanuts will adjust the strike closer to achieve a 6-10 delta return.
Strikes are selected based on these parameters at 0900 UTC on Fridays, when auctions are conducted.
There are 3 main scenarios when considering using a long-put strategy. To illustrate these scenarios, it is assumed that the initial price of ETH is $1,000. The user decides to long 1 put option with the strike price of $800 with a 1-week tenor. The total premium payable is $10 with a borrowing fee of $1. The total cost for this long-put position is $11.
Scenario 1: The spot price of ETH increases to $1,500 at expiry (above the strike price & above the initial price)
- 1.The long-put option expires worthless
- 2.Net Position: -$11 (total cost)
Scenario 2: The spot price of ETH decreases to $795 at expiry (below the strike price & below the initial price)
- 1.The long put option is exercised and the user has the right to buy ETH at the strike price of $800.
- 2.Net Position: $800 (strike price) - $795 (spot price at expiry) - $11 (total cost) = -$6
- 3.This scenario demonstrates that for a user to profit from a long put, users need to account for the total cost incurred to buy the put option.
Scenario 3: The spot price of ETH decreases to $600 at expiry (below the strike price & below the initial price)
- 1.The long put option is exercised and the user has the right to buy ETH at the strike price of $800.
- 2.Net Position: $800 (strike price) - $600 (spot price at expiry) - $11 (total cost) = $189
Last modified 5mo ago