Protective Put Options Strategy (Best Guide w/ Examples)

Поделиться
HTML-код
  • Опубликовано: 26 янв 2025

Комментарии • 35

  • @projectfinance
    @projectfinance  Год назад

    ✅ New to options trading? Master the essential options trading concepts with the FREE Options Trading for Beginners PDF and email course: geni.us/options-trading-pdf

  • @djohnson4465
    @djohnson4465 Год назад +1

    in all the videos regarding options or how to use options as insurance this/your video is the most educative i like that you share how much the option initially cost... now i understand what ive been trying to understand!!!

  • @nicolecherine
    @nicolecherine 5 лет назад +13

    This explanation is beyond amazing!

  • @surajsajeev1988
    @surajsajeev1988 3 года назад +2

    Can I buy a put to protect my leap option?

  • @TimO-lj2uk
    @TimO-lj2uk 5 месяцев назад

    Thanks for content! One of the simplest yet most efficient strategies...

  • @FredLe-qc3hi
    @FredLe-qc3hi 8 месяцев назад

    What time period do you recommend and delta?

  • @yue9181
    @yue9181 4 года назад +2

    Why would the put be automatically exercised if it is ITM at expiration? I assume the definition of 'put' is that you have the right but not the obligation to sell the stock.

  • @durangakarunarathna6906
    @durangakarunarathna6906 10 месяцев назад

    Great explanation.Thank You!

  • @Randhawa-in-USA
    @Randhawa-in-USA 4 года назад +1

    How to buy a Protective/Married put on one go on TD ?

  • @Kerni094
    @Kerni094 3 года назад +3

    Great video, I have however one question: Why is this preferable over a single long option? When I am purchasing the call option my downside risk is also "hedged"/limited by the prime of the option while my upside is unlimited and leverage... In the end I am ending up with the same scenario but with less capital and trading cost involved?

    • @projectfinance
      @projectfinance  3 года назад +1

      Great question! Actually, your head is right where it needs to be. A protective put (long stock + long put) is actually the SAME as buying a call at that same strike price. For instance, if you bought 100 shares of stock at $105/share and bought the 95 put at the same time, that position (long stock + long put) is equivalent to simply buying the 95 call.
      In both cases, you lose the maximum amount of money if the stock is

    • @chevon1920
      @chevon1920 3 года назад +2

      Yes but this is if you want to own stock long term. If you buy a call option it could expire worthless before it could go into the money and you won’t be able to collect dividends.

    • @JayAr02
      @JayAr02 3 года назад

      @@chevon1920 I would also say, as far as I understand having long stock + long put then at the day of expiration it would be the same profit or loss as if you bought an equivalent long call. But with the difference that when the stock price is higher than breakeven the long call will be sold with profit, whereas with the long stock + long put you will be in 'virtual' profit and you could just sell the long stock with that profit but you can also keep it for long term. (You could then for example protect it with a new long put with higher strike price).
      However with the call after it's expiration you could also just buy the stock or another call which could then be similar again to long stock+long put. But yes, I guess if the stock pays a dividend you won't get that with a call...

    • @robertocfaguiar
      @robertocfaguiar 2 года назад

      Great question. Keep it simple with less cost. I was wondering about the same thing. Just purchase a call at a lower strike price. Much, much better.

  • @francisdebbane1047
    @francisdebbane1047 4 года назад +1

    How about this strategy when you already own shares in a stock that have increased about 30% already. Wouldn’t this strategy be beneficial in being able to sell the shares at the current price if the price tanks ? Wouldn’t you want to exercise the option or let it expire so that your profits on the stock get realized in case the shares fall rapidly and you are unable to sell them in time. If you choose a strike price that is considerably lower than the current price does the stock price have reach that level before you are able to exercise the option and sell the shares ?

  • @heablubablu3906
    @heablubablu3906 3 года назад +1

    Do I need to sell stocks with the married put together? Could I sell the shares first at a relatively high price and then sell the put if I feel the stock is still going to drop.

  • @thepeaches5116
    @thepeaches5116 5 лет назад +3

    It really helped me to understand!!!!!!

    • @projectfinance
      @projectfinance  4 года назад +1

      Awesome! I am glad! Thank you for watching.

  • @rahulsony77
    @rahulsony77 2 года назад

    Isn’t it true that protective put strategy provides maximum profit, amongst all other Futures and options strategies, for some weeks of investing, since the Breakeven can be achieved within weeks ? Or is there any other strategy to make more profit ?

  • @1911kodi
    @1911kodi 4 года назад +1

    What would you propose to protect a whole portfolio of 15-20 stocks? Different puts for every stock or is there an easier alternative? Thanks a lot!

  • @muthonimurira2495
    @muthonimurira2495 5 лет назад +1

    This is such a good explanation, thank you.

    • @projectfinance
      @projectfinance  5 лет назад

      Thanks for the comment and you're welcome!

  • @djohnson4465
    @djohnson4465 Год назад

    if the idea of put is exact meaning for every share of a stock i buy it an extra amount and if that stock rose almost 70% in a month time im basically going to be making 60% of that profit, and if that stock falls almost 40% during the month it will only officialize my loss in the 10% radius... im fine with that because ive entered stocks that by the end of the month they rose almost 80% but in the week i enter them they fall 60% and since i didnt have insurance/option put on them i almost felt like it get riskey so i jump out once i see them fall below 10% BUT i feel if i put an option insurance on them i would have the gut to ride them through their 60% falls just to cash out when they finally rise by the end of the month to almost 80 to 200%

  • @kodeshian1
    @kodeshian1 7 лет назад +1

    Thank you for the explanation. I can se why this wouldn't be a great strategy on it's face... However, what about setting up a nested trade with say a bear call spread using shorter term options than your long put?

    • @projectfinance
      @projectfinance  7 лет назад +1

      It can be a very costly strategy over time.
      What you're referring to sounds like a collar constructed with a call spread instead of a short call.
      You can surely sell a near-term call spread against your longer-term put. However, that short-term call spread is going to have to be very close to the current stock price for you to get any premium out of it.
      With that said, selling a call spread instead of a short call will leave you with more profit potential should the stock increase.

  • @thetempleofdata6862
    @thetempleofdata6862 3 года назад

    Very informative!

  • @Jim-op5fv
    @Jim-op5fv 4 года назад

    Is there a difference between put options and protective put options?

    • @jonathanngai5956
      @jonathanngai5956 4 года назад +2

      @@108987 Hey Patrick, can I ask you a question, why is Max Loss = [Stock - Strike + premium]? I would have thought max loss is just assume stock depreciates to zero. then Max loss should just be [Strike - premium]? Thanks!

  • @datdudejmorg
    @datdudejmorg 4 года назад

    Can you “marry” a put, with a call if it hasn’t been exercised yet? Or do you have to already own the shares?

    • @Yellowgary
      @Yellowgary 3 года назад

      Yes this is called a straddle or a strangle depending on the strikes. However you should never really buy a strangle only sell them.

  • @samuelcollin9025
    @samuelcollin9025 7 лет назад

    Very well explained.