Married Put

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The Married Put strategy is also referred to as a Protective Put. In a Married Put strategy an investor will purchase shares of the underlying stock while purchasing an equivalent married puts option trading of put contracts to protect the purchased shares of stock.

The purchased put acts as insurance for the underlying shares as they have purchased the right to sell the shares of stock at the strike price between the time of purchase and the expiration date of the put. Since the investor is purchasing the stock and an equal number of puts, there is an overall net debit for the position. The total out of pocket value to enter into a Married Put trade is equal to the price of the stock plus the premium of the put option.

This value is referred to as the Net Married puts option trading. The maximum profit for the position is unlimited as the stock could rise infinitely. The maximum monetary value at risk is equal to the net debit for the position minus the strike price of the purchased put. Investors use the Married Put strategy to protect shares of stock against large drops in the underlying stock.

This is a bullish strategy, as the investor is looking for an increase in the underlying stock price to earn a profit. The purchased put gives married puts option trading investor extra insurance on the position for an additional cost.

Profits come from the stock rise. The put protects against large stock decline. Buy an equivalent number of put contracts against the purchased shares. The sum of the stock price and the put premium is the net debit. The maximum risk is equal to the net debit minus the put strike price.

The maximum profit is unlimited as the stock could rise infinitely. The Break Even point is equal married puts option trading the net debit. Profit is realized when the stock rises above the Break Even point.

Calculations for the Married Put Strategy are: I am a novice at trading options I am an experienced options trader How did you hear about us? Your Password will be sent to you via email. Please make sure that your email is correct. Neutral to bullish strategy. Our advisory newsletter for married puts is Fusionavailable at RadioActiveTrading.

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