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Question

What is a protective put option?

Answer

A protective put is an insurance policy for your stock — you buy a put option that sets a minimum sale price for your shares. If the stock drops, you can sell at the strike price and limit losses; if it rises, you keep the gains minus the put’s cost.

Related FAQs

Self-managing post-IPO wealth or working with an advisor: which is better?

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RSUs or ISOs: which has better tax treatment?
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Last Updated May 20, 2026
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