Protective Put Example: Breakeven and Maximum Loss
Hedge and Acquire StockOIC instructor Roma Colwell shares a numeric example of a protective put, showing how to calculate maximum loss, the breakeven price and outcomes at different stock prices at expiration.
0:00 The Protective Put Example Setup
0:24 Defining Your Risk With the 95 Put
0:56 P&L at Each Expiration Price
2:24 Calculating the Max Loss
2:41 With vs. Without the Put on a Drop
3:07 Protection, Not Profit
4:03 The P&L Graph and Its Long-Call Shape
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