Options / Strategy

Protective Put

Definition

Buying a put option to hedge a long stock position against downside risk while retaining unlimited upside.

Example

Owning shares and buying a protective put creates insurance against large declines.

Related Terms

Frequently Asked Question

What is a Protective Put?

A Protective Put involves buying a put option against a long stock position to limit downside risk while retaining unlimited upside. It acts as portfolio insurance — you pay a premium to cap your maximum loss.

APA Citation

Clark, R. (2025). Protective Put. VixShield Trading Glossary. Retrieved from https://www.vixshield.com/glossary/protective-put

Russell Clark, FNP-C

Author of SPX Mastery series · Founder of VixShield

Last updated: April 24, 2026 · Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark

⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.

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Real questions answered using the Protective Put framework — click any to read the full answer:

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