How a Protective Put Works to Limit Stock Losses

A protective put pairs a put option with stock you already own. Using a car insurance comparison, OIC instructor Roma Colwell breaks down how the two positions move together as price changes.

0:00 Long Put Basics: Rights and Obligations
0:43 Exercise Means Selling 100 Shares
1:00 Why Investors Buy Puts
1:23 Fixed Cash Outlay as Your Risk
1:46 Buying Puts as Insurance
2:36 The Protective Put and Cautious Bullishness
3:10 How the Put Offsets a Stock Loss
3:47 Protection, Not Profit
4:32 The Trade-Off: Cost of Premium

Register to view the complete The Investor's Safety Net – Protective Puts Explained webinar:
https://bit.ly/3RfvRR6
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