Protective Put Strategy
Bullish with ProtectionBeginnerInsurance Strategy
Own stock and buy puts for downside protection while maintaining unlimited upside potential.
How It Works
1
Own Stock: Purchase or already own 100 shares of the underlying stock.
2
Buy Put: Purchase a put option to establish floor price for your shares.
3
Protection Active: Put provides insurance - you can sell at strike if stock falls below it.
Key Metrics
Max Profit:Unlimited (stock price can rise indefinitely)
Max Loss:Stock Price - Strike Price + Premium Paid
Breakeven:Initial Stock Price + Premium Paid
Protection Level:Put Strike Price
Insurance Cost:Put Premium Paid