What Is the Alternative Options Strategy Known as a "Protective Put"? ⎊ Path

What Is the Alternative Options Strategy Known as a “Protective Put”?

A protective put is a hedging strategy where an investor who holds a long position in the underlying asset buys a put option on that same asset. This strategy provides insurance against a fall in the asset's price below the put's strike price, while still allowing the investor to profit from unlimited upside.

It is often described as a "synthetic call" because the combination of Long Asset + Long Put has a payoff profile similar to a long call option.

How Does a Put Option Provide a Similar Hedging Function to a Short Futures Contract?

How Can a ‘Protective Put’ Strategy Be Used to Manage Downside Risk on a Long Crypto Position?

What Is a “Covered Call” Strategy in the Context of a Cryptocurrency Holding?

How Does a Covered Call Differ from a Protective Put Strategy?

Define a ‘Protective Put’ Strategy for Hedging a Long Crypto Position

What Is the Main Difference between Using a Put Option and a Short Future for Hedging?

What Is a Protective Put Strategy in Crypto Options?

How Does a Deep In-the-Money Call Option Affect the Covered Call Profile?

Glossar

Protective Put

Hedge ⎊ A protective put, within cryptocurrency derivatives, functions as a limited-risk strategy employed to mitigate downside exposure in an underlying asset, typically a digital currency holding.