A married put is a name given to an options trading strategy where an investor, holding a long position in a stock, purchases an at-the-money put option on the same stock to protect against depreciation in the stock’s price. This strategy fits when your near-term outlook on the stock or index is positive but you want to cap the downside. A married put has limited risk and unlimited profit potential:
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- Maximum loss = stock purchase price minus put strike, plus the put premium paid
- Breakeven at expiration = stock purchase price plus the put premium paid
- Upside = unlimited, reduced by the cost of the put
The put works like insurance: it costs a premium, and it pays off only if the stock falls below the strike. This article is educational, not investment advice.
Use the Married Put Excel template to model the strategy, model the payoff with the MarketXLS options profit calculator, or browse strategy spreadsheets in the MarketXLS templates library.
