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.

Here's how the strategy works, as well as some pros and cons, in which there is academic research both for and against using protective puts in your portfolio. Pros of a Protective Put Strategy 1.

In a protective put, you buy an asset and buy the put option on the asset. This strategy is useful for investors with a long position in an asset who want to limit their exposure to downside risk.

Protective puts are simply long put options written against an existing long equity position. For example, suppose that you own 100 shares of the SPDR S&P 500 ETF Trust (SPY, A ) at 160.00 and are ...

A protective put locks in a selling price (the strike) for the shares, just in case they take a turn for the worse. For instance, let's say you bought 100 shares of Stock XYZ at $100 apiece, and ...

Thus, a Protective Put Option strategy protects the investor in the case of a price correction. The purpose of this strategy is to hedge the risk involved with an unexpected fall in prices.

This week was a hot one for most of the eastern seaboard, including up to Nova Scotia, where I live. Let’s hope the weather ...

Understanding a Protective Collar. A protective collar strategy combines a long asset position — for example, in a stock — with a long put position and a short call position on the same asset.

Protective Puts Strategy for Earnings Season October 17, 2024 — 01:50 pm EDT Written by [email protected] for Schaeffer -> ...

Protective puts are simply long put options written against an existing long equity position. For example, suppose that you own 100 shares of the SPDR S&P 500 ETF Trust (SPY, A ) at 160.00 and are ...

Protective puts are one way traders can "insure" their investment and limit potential losses during earnings season BREAKING NEWS: S&P 500, Nasdaq Snap Quarterly Win Streaks Toggle navigation ...

Another earnings season is kicking off, with big banks leading the way. While the major indexes are currently on a record-setting run, profit-taking and uncertainty over the future of interest ...