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28 Δεκ 2020 · A protective put is a risk-management strategy using options contracts that investors employ to guard against the loss of owning a stock or asset. The hedging strategy involves an investor...
A protective put is a risk management and options strategy that involves holding a long position in the underlying asset (e.g., stock) and purchasing a put option with a strike price equal or close to the current price of the underlying asset.
15 Μαρ 2024 · Protective puts are purchased when an investor owns an asset and wants to protect against future downside price movement. Owning the long put defines risk by allowing the investor to sell stock at the long put option’s strike price. Are protective puts bullish or bearish?
A protective put position is created by buying (or owning) stock and buying put options on a share-for-share basis. In the example, 100 shares are purchased (or owned) and one put is purchased. If the stock price declines, the purchased put provides protection below the strike price.
11 Νοε 2023 · A protective put strategy combines a long stock position with a put option, representing the first half of put-call parity. This combination is sometimes referred to as a married put. The name “protective put” stems from the downside protection the put option provides to the long stock position.
14 Ιουλ 2023 · The protective put strategy involves purchasing a put option on a security or portfolio of securities that provides the investor with the right to sell the underlying asset at a predetermined price, known as the strike price, at any time before the expiration of the option.
11 Ιαν 2024 · Protective Put Diagram. The protective put strategy is a prudent choice for investors seeking to balance the potential for growth with the assurance of a defined safety net. It exemplifies the adage of hoping for the best while preparing for the worst, enabling investors to navigate the undulations of the stock market with greater confidence.
