AI Long Put Strategy
AI (C3.ai, Inc.), in the Technology sector, (Information Technology Services industry), listed on NYSE.
C3.ai, Inc. operates as an enterprise artificial intelligence (AI) software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. It provides C3 AI application platform, an application development and runtime environment that enables customers to design, develop, and deploy enterprise AI applications; C3 AI Ex Machina to for analysis-ready data; C3 AI CRM, an industry specific customer relationship management solution; and C3 AI Data Vision that visualizes, understands, and leverages the relationships between data entities. It also offers C3 AI applications, including C3 AI Inventory Optimization, a solution to optimize raw material, in-process, and finished goods inventory levels; C3 AI Supply Network Risk, which provides visibility into risks of disruption throughout the supply chain operations; C3 AI Customer Churn Management, which enables account executives and relationship managers to monitor customer satisfaction, as well as to prevent customer churn with AI-based and human-interpretable predictions and warning; C3 AI Production Schedule Optimization, a solution for scheduling production; C3 AI Predictive Maintenance, which provides insight into asset risk to maintenance planners and equipment operators; C3 AI Fraud Detection solution that identify revenue leakage or maintenance and safety issues; and C3 AI Energy Management solution. In addition, it offers integrated turnkey enterprise AI applications for oil and gas, chemicals, utilities, manufacturing, financial services, defense, intelligence, aerospace, healthcare, and telecommunications market segments. It has strategic partnerships with Baker Hughes in the areas of oil and gas market; FIS in the areas of financial services market; Raytheon; and AWS, Intel, Google, and Microsoft. The company was formerly known as C3 IoT, Inc. and changed its name to C3.ai, Inc. in June 2019.
AI (C3.ai, Inc.) trades in the Technology sector, specifically Information Technology Services, with a market capitalization of approximately $1.23B, a beta of 1.99 versus the broader market, a 52-week range of 7.675-30.24, average daily share volume of 5.7M, a public-listing history dating back to 2020, approximately 891 full-time employees. These structural characteristics shape how AI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.99 indicates AI has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a long put on AI?
A long put buys downside exposure with a fixed maximum loss equal to the premium paid; profit accrues if the underlying closes below the strike minus premium at expiration.
Current AI snapshot
As of May 15, 2026, spot at $8.70, ATM IV 87.75%, IV rank 80.52%, expected move 25.16%. The long put on AI below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.
Why this long put structure on AI specifically: AI IV at 87.75% is rich versus its 1-year range, which makes a premium-buying AI long put relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 25.16% (roughly $2.19 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AI expiries trade a higher absolute premium for lower per-day decay. Position sizing on AI should anchor to the underlying notional of $8.70 per share and to the trader's directional view on AI stock.
AI long put setup
The AI long put below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With AI near $8.70, the first option leg uses a $8.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AI chain at a 28-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 AI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $8.50 | $0.74 |
AI long put risk and reward
- Net Premium / Debit
- -$73.50
- Max Profit (per contract)
- $775.50
- Max Loss (per contract)
- -$73.50
- Breakeven(s)
- $7.77
- Risk / Reward Ratio
- 10.551
Max profit equals the strike minus premium times 100 (reached at zero); max loss equals the premium times 100. Breakeven is strike minus premium.
AI long put payoff curve
Modeled P&L at expiration across a range of underlying prices for the long put on AI. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -99.9% | +$775.50 |
| $1.93 | -77.8% | +$583.25 |
| $3.86 | -55.7% | +$391.00 |
| $5.78 | -33.6% | +$198.75 |
| $7.70 | -11.5% | +$6.49 |
| $9.62 | +10.6% | -$73.50 |
| $11.55 | +32.7% | -$73.50 |
| $13.47 | +54.8% | -$73.50 |
| $15.39 | +76.9% | -$73.50 |
| $17.31 | +99.0% | -$73.50 |
When traders use long put on AI
Long puts on AI hedge an existing long AI stock position or express a bearish view with defined risk; position sizing typically scales the put notional to the underlying AI exposure being hedged.
AI thesis for this long put
The market-implied 1-standard-deviation range for AI extends from approximately $6.51 on the downside to $10.89 on the upside. A AI long put expresses a directional view that the underlying closes below the strike minus premium at expiration, frequently sized to hedge an existing long AI position with one put per 100 shares held. Current AI IV rank near 80.52% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on AI at 87.75%. As a Technology name, AI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AI-specific events.
AI long put positions are structurally bearish; the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. AI positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AI alongside the broader basket even when AI-specific fundamentals are unchanged. Long-premium structures like a long put on AI are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current AI chain quotes before placing a trade.
Frequently asked questions
- What is a long put on AI?
- A long put on AI is the long put strategy applied to AI (stock). The strategy is structurally bearish: A long put buys downside exposure with a fixed maximum loss equal to the premium paid; profit accrues if the underlying closes below the strike minus premium at expiration. With AI stock trading near $8.70, the strikes shown on this page are snapped to the nearest listed AI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AI long put max profit and max loss calculated?
- Max profit equals the strike minus premium times 100 (reached at zero); max loss equals the premium times 100. Breakeven is strike minus premium. For the AI long put priced from the end-of-day chain at a 30-day expiry (ATM IV 87.75%), the computed maximum profit is $775.50 per contract and the computed maximum loss is -$73.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AI long put?
- The breakeven for the AI long put priced on this page is roughly $7.77 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current AI market-implied 1-standard-deviation expected move is approximately 25.16%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a long put on AI?
- Long puts on AI hedge an existing long AI stock position or express a bearish view with defined risk; position sizing typically scales the put notional to the underlying AI exposure being hedged.
- How does current AI implied volatility affect this long put?
- AI ATM IV is at 87.75% with IV rank near 80.52%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.