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   Protective Put
   















 

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Protective Put

Protective Put (3 graphs)
A combination of a long put contract and a long position in the underlying. The combination is the risk equivalent of a long call with the same strike price- with some differences in the timing and desirability of early exercise if the put is American-style. A protective put sets a downside limit at expiration equal to the strike minus the put premium. See Married Put.

Glossary * P