Protective Put
Outlook: Bullish
Hedging and income
Long 100 shares + long 1 put. Floor under the position; payoff identical to a long call.
Max profit
Unbounded above the share basis.
Max loss
(Share basis - put strike) + put premium.
Breakeven
Share basis + put premium.
Legs
Long
1×
stock
Long
1×
put
ATM −5
Structure
Long 100 shares + long 1 put at or below current spot.
When to use
Protect a long position through a known volatility window without selling the shares.
Example
Long 100 SPY @ $450 + long 445 put $5. Floor at $440. SPY crashes to $420 → put gains offset stock loss; max loss $1,000.
Notes
- Cost is the put premium; behaves like a long call by put-call parity.
Build it in the simulator
Open this structure in the app, adjust spot, IV, and DTE, and watch the payoff and Greeks move.
Get the appRelated strategies
Covered Call
Long 100 shares + short 1 call above the price. Income trade against held shares.
Collar
Long 100 shares + long put below + short call above. Caps both sides; near-zero net cost possible.
The Wheel
Cycle: cash-secured put → assignment → covered call → assignment → repeat. Systematic income.