Strategy Overview
Low RiskBeginner FriendlyBullishNeutral
A protective put (or married put) involves buying puts against shares you own. It acts as insurance, limiting your downside while maintaining unlimited upside.
Max Profit
Unlimited (stock appreciation - put cost)
Max Loss
Stock price - strike + premium paid
Breakeven
Stock price + premium paid
Probability
Insurance, not directional bet
hist. est.
Loading chart...
Example Setup Calculator
$
Debit Paid
$250
Max Profit
Unlimited
Max Loss
$750
Breakeven
$102.50
Strategy Components
BUY OTM PUT
Buy OTM put per 100 shares owned
When to Use
- You own shares and want downside protection
- You expect volatility but are long-term bullish
- You have unrealized gains to protect
- Major event or uncertainty ahead
Best Market Conditions
- Uncertainty ahead
- Large unrealized gains
- Elevated fear but bullish outlook
Best Practices
- Choose strike based on maximum acceptable loss
- Consider cost vs. protection level
- Roll protection as stock moves up
- Fund with covered calls (collar)
Ready to Trade?
Review Protective Put and practice it in paper trading with the school workflow.
Paper Trading