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married put strategy

Definition
Hedging technique of buying a put option for a certain number of shares of a stock and, simultaneously, buying the same number of shares of that stock. This strategy yields an unlimited upside of stock ownership (dividends and higher prices) coupled with a limited downside of a drop in the stock's price. If the stock declines the investor can exercise the put option to limit the losses and, if the stock rises, can choose to sell at the most advantageous time. It is similar to but not the same as protective puts.



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married put strategy is in the Options, Trading and Stocks subjects.

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