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Protective puts for a long term stock position
A protective put sets a contractual exit floor for matched shares during the option’s life. The protection has a price and an end date.
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Options Trading Guide
Understand calls and puts, analyse option prices and build strategies for direction, income and protection. Follow ten stages from contract basics to advanced structures and disciplined trade management.
Start with Calls and puts from both sides of the contract, then follow the next lesson links. Explore 40 lessons with worked examples, exercises and further reading.
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Protecting Long Term Investments · All lessons
Protecting Long Term Investments
Use puts, collars and selected overlays while preserving a clear investment objective.
Advanced
Collars that exchange some upside for protection
A collar funds some put protection by selling a call against owned shares. It creates both a floor and a ceiling for the covered period.
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Advanced
Put spread hedges and the protection that runs out
A put spread hedge reduces premium by limiting the put payoff. Below the lower strike, the stock holding can resume losing value without additional option protection.
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Advanced
LEAPS calls as an alternative to owning shares
LEAPS are long dated options, not permanent shares. They can create directional exposure with less initial cash while introducing expiration and premium risk.
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