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   Floored Put
   















 

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Floored Put

Payout of a Floored Put
A put position with a maximum payout limited by the terms of the contract- analogous to a bearish vertical put spread and similar in form to a reverse equity risk reversal. The terms on which the floor provision comes into effect will vary considerably by market and should be checked carefully. A put CAPS with its 'exploding' early exercise price trigger is a variety of floored put. Compare with Capped Call, Corridor (1) (diagram). Also called Limited Put.

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