How to best protect your stock position?

Calculator · free · no signup

Thinking of reducing the risk of a downside? Design a protective put or zero-cost collar hedge.

Beta · invite-only · AlphaLatitude Inc. · Free Tools

You priced one hedge. The beta picks the right hedge structure given your full equity stack and tax situation.

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What this calculates

  • Annual put cost: as a percent of your position, and in dollars.
  • Zero-cost collar (long put paid for by a short call): max loss and upside cap.
  • Payoff at expiration across stock-price scenarios, in dollars.
  • How floor, tenor, and cap trade off as you size the structure.
  • Tax-treatment notes on Section 1092 straddles and qualified covered calls.

Pricing is off the current option chain (implied volatility drives the put price) on the date shown.

Read the deep dive: Seven hedging mistakes that erase the protection you paid for →

Methodology

Optimization. Prices a protective put or zero-cost collar via Black-Scholes against implied volatility pulled from a daily-refreshed option-chain snapshot (not a sector estimate); reports annual cost, max loss, upside cap, and bad-year coverage so you can pick the structure that fits your floor. The search is deterministic: the same inputs return the same answer, so the recommendation is verifiable.

Tax-code coverage. Full federal code (ordinary brackets, long-term capital gains, AMT with credit recovery, FICA, Net Investment Income Tax) plus all 50 states and DC for state ordinary brackets and LTCG treatment. State AMT modeled for CA, CO, CT, MN. Brackets reflect IRS Rev. Proc. 2025-32 and the One Big Beautiful Bill Act (OBBBA) provisions for tax year 2026. Validated against 870+ unit tests covering bracket math, AMT credit recovery, state conformity, and the optimizer's search path.

Why use an optimizer rather than asking an LLM to do the math: a benchmark of five frontier large language models on the same multi-year ISO problem found that all 15 trials overshot the achievable after-tax outcome by 2x to 20x (HackerNoon write-up).

AI assistant integration

Use this from Claude, Cursor, or VS Code

Ask your agent:

“I hold 5,000 shares of NVDA. Price a 6-month protective put and a zero-cost collar.”

With the OptionsAhoy MCP installed, your agent calls protective_put_price and returns the same after-tax answer this calculator computes.

Add to CursorAdd to VS CodeAll install options →
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You priced one hedge structure. The beta sizes and times it.

OptionsAhoy chooses the hedge size, structure, and timing alongside sell-downs and tax timing, weighted by bullish, neutral, and bearish scenarios. Free during beta.

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