Protective Put
Definition
Buying a put option to hedge a long stock position against downside risk while retaining unlimited upside.
Example
Owning shares and buying a protective put creates insurance against large declines.
Related Terms
Frequently Asked Question
What is a Protective Put?
A Protective Put involves buying a put option against a long stock position to limit downside risk while retaining unlimited upside. It acts as portfolio insurance — you pay a premium to cap your maximum loss.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.