Skip to main content

What Is the Term for Holding an Asset and Buying a Put Option?

The term for holding an underlying asset (like Bitcoin) and simultaneously buying a put option on that same asset is a "protective put." This strategy is used to establish a floor on the value of the asset, ensuring the investor can sell it at no less than the put's strike price. It is essentially an insurance policy for the long position.

What Is a Protective Put Strategy in Options Trading?
How Can a Protective Put Option Be Used to Hedge against This Maximum Loss?
Provide a Simple Example of a Protective Put Strategy for Bitcoin
What Is a Protective Put and How Is It Used in Crypto Portfolios?