protective put

protective put definition - business

protective put

A put option owned in conjunction with the corresponding stock. A protective put guarantees the holder will receive, at minimum, proceeds that equal the exercise price of the put. For example, an investor could hold 100 shares of Coca-Cola while also holding a put on Coca-Cola stock. The protective put shelters the investor in case the stock's price declines in the market. Also called married put.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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