protective put


A put option purchased for an underlying security that is already owned by the holder of the option. A protective put defends against a drop in the share price of the underlying security.

Use protective put in a sentence

It was a protective put and I was glad too because I had been searching for something like that for a long time.

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The client was concerned about a potential drop in the price of the security so we put in him in a protective put.

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Investors will often purchase protective puts in order to shield unrealized profits in a given security against significant market moves to the downside.

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protectionism protective put buying