How Can a Put Option Be Used to Set a ‘Floor Price’ for a Token Holder’s Portfolio?

Buying a put option on the held token creates a 'protective put' strategy. The strike price of the put option acts as the floor price.

If the token price falls below the strike price, the holder can exercise the put, selling the token at the higher strike price. This limits the maximum loss while allowing the holder to benefit from any potential upside price movement, effectively insuring the portfolio against a crash.