How much is hedging every position with protective puts costing me per year?
Enter Your Numbers
This estimates the ongoing annual drag of a rolling protective put program, not a single position.
Your Result
Fill in the fields on the left and click Calculate My Hedging Drag to see the annual cost.
How this is calculated
Dollar value hedged equals total portfolio value multiplied by the percent you keep hedged.
Annualized hedging cost equals the dollar value hedged multiplied by your entered annual cost rate.
The comparison table holds your cost rate constant and shows how the dollar drag scales at 25%, 50%, 75%, and 100% coverage, so you can see the tradeoff between broader protection and higher ongoing cost.
This models a rolling hedge program as a flat annual percentage cost. Actual protective put costs vary with strike distance, expiration, and implied volatility at the time each position is opened, and this tool does not price individual option contracts.
Risk & liability disclaimer: This tool only performs simple arithmetic on the numbers you enter. It is not financial, investment, or tax advice, and it does not access your broker account or verify your actual fills. Trading Habits is not a broker-dealer, registered investment adviser, or tax professional, and is not affiliated with any broker, exchange, or data provider. Always verify results independently and consult a licensed professional before making any trading or financial decision.
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