Options University Blog

Married Put is an option strategy in which an investor, who holds a long position in stock, purchases a put on the same stock to order to guard protection against depreciation in the stock’s price.

The net effect of a long position in both the put and its underlying stock would reflect the potential gains or losses which have created from a married put strategy .It thus creates a strong foundation for procuring unlimited profits and minimizing potential losses. As soon as the stock price falls down below the strike price before the expiration of the option, exercising of the put option and selling off the stock at the strike price would book the profits for the investor.

On the other hand, when the stock price increases above the strike price, it is advisable to the investor to not to exercise it and thus the investor realize the profit by selling it off at a higher price if and only if the stock price is above the overall cost of the position. In essence, this is like purchasing insurance against your stock.

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