Introduction

A married put strategy is a strategy when the trader is bullish on a stock. He or she wants to benefit from the uptrend, but is uncertain in the near term. An investor may choose to use this strategy as a way of protecting their downside risk when holding a stock. This strategy functions similarly to an insurance policy; it establishes a price floor in the event the stock's price falls sharply.

Married put is also known as synthetic long call

Pay Off Chart

Maximum Gain

Unlimited

Maximum Loss

Total Premium Paid

Composition

• Purchases an underlying stock
• Simultaneously purchases put options with an equivalent number of shares