Consider a hypothetical example in which you hold a share bought at 100 yen and buy a put with a strike price of 90 yen for a premium of 2 yen. Even if the share price at expiry falls below 90 yen, the loss stops at 100 − 90 + 2 = 12 yen. At 90 yen or higher, the put is not exercised, the profit is 2 yen smaller than holding the share alone, and the break-even point is 102 yen. The gain from a rise has no cap.
Protective put
- Japanese
- プロテクティブ・プット
- Also known as
- Married put
- Last reviewed
- September 25, 2026
This is a draft, shown for review before publication.
A protective put is a combination in which you keep holding the underlying asset and buy a put option (put) on that asset. The premium paid reduces the profit and loss, but the loss from a fall in the underlying is capped.