What is protective put?Protective Put
Buying a put while holding the stock, like buying insurance against a price drop.
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- Hedging StrategiesHedging with Options: Protective Puts and Collars
Futures lock in both sides; options only block the bad side. See how much it costs to "insure" a stock, and how to save on the premium.
- Options BasicsPut Options
Buying a put: the right to sell at the strike, like "insurance against a fall". The lower the stock goes, the more it's worth.
- Options: Next StepsCovered Calls: Collecting Rent on Your Shares
You already hold 100 shares, so you sell 1 call to collect a premium. If the stock doesn't rise you earn extra income; if it soars, your shares get bought at the strike. You trade upside for cash.
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