Learn / Strategies
Protective put
Own 100 shares and BTO (buy to open) a put as a floor. The put is insurance. Max stock loss sits near the strike, minus the premium.
A protective put is long stock plus a long put. You still want the shares to rise. The put is a floor, not a short. It is not a collar — there is no short call capping the upside.
Own 100 at $150. BTO (buy to open) a $140 put for $4. If the stock is $130 at expiration the put is worth $10 and the package loss is about $1,400, not the full $2,000 drop. Teaching numbers only.
The lab includes the shares. Slide below $140: P/L (profit and loss) flattens near the floor. Slide higher: you paid $4 for a put that dies.
Teaching lab
Shares plus a long put
Own 100 at $150. BTO a $140 put for $4. Slide below $140 — the floor, not a free-fall.
- P/L / share
- -2.60
- ×100
- -260
- Delta
- +0.814
- Gamma
- 0.0203
- Theta / day
- -0.0356
- Vega / vol pt
- +0.1410
P/L / share
vs the lesson entry
Delta
share-equivalent
Gamma
peaks near the strikes
Theta / day
clock
Vega / vol pt
fear priced in
Rho / rate pt
small at 45 days
The put is insurance. Shares can still fall to the strike. Teaching only.
Try it: Analyze this structure
Tickets for this structure
BTO (buy to open) · STO (sell to open) · BTC (buy to close) · STC (sell to close). Illustrative fills only. We never send these orders.
BTO (buy to open)
Open a long
Buy to open (the put)
Stock $150. BTO (buy to open) 1× 45-DTE (days to expiration) $140 put at $4.00 ($400). Floor near $140. Shares still sit in the book.
STC (sell to close)
Close a long
Sell to close (the put)
Stock later $130, put $11. STC (sell to close) the put. Insurance worked. The share loss is a separate journal line.
BTC (buy to close)
Close a short
Buy to close — you did not sell this put
There is no short. Do not STO (sell to open) another put “to pay for” this one unless you mean a different structure.
STO (sell to open)
Open a short
Not this lesson
A short call on the same shares is a collar, not a protective put. Use the collar lesson for that band.
Floor, not a short
You paid a debit. The shares can still fall to the strike. Below the strike the put offsets the next print, minus what you paid. This site never places the stock or the put.
How the Greeks move
Shares are +1.00 delta. The long put adds negative delta and costs theta. Slide through $140: the floor shows in P/L (profit and loss). A quiet rise can still leave you behind the debit versus unhedged shares.
Checking for a quiz…
Teaching numbers only — not a live quote, not a fill, not financial advice. All lessons · Back to Practice · Replay · Journal.