Glossary · Options

Protective put

Buying a put on shares you own to set a floor under losses.

Why it matters

It works like insurance: you pay a premium and the put pays out if the stock falls below the strike.

How to read it

Cheaper per day when bought 60 to 120 days out, and when IV rank is low.

Related

Put optionThe right to sell 100 shares at the strike price before expiration.CollarOwning shares, buying a put below and selling a call above to pay for it.

In the Cluenex app, this explanation opens next to every protective put figure, with the live reading for the stock you are looking at. Open it in Cluenex