A protective put strategy is used to hedge a long stock position by purchasing a put option. This video explains how investors use this strategy to limit downside risk while maintaining upside potential—and how to break it down on exam questions.

You’ll learn:

• How protective puts are structured and why they’re used

• Risk/reward profile, breakeven point, and maximum loss

• When a protective put is most appropriate based on market outlook

• How to distinguish protective puts from speculative put purchases

• How this strategy appears in suitability and math-based exam questions

📘 Related Exams: SIE, Series 7, Series 9, Series 65, Series 66
🧠 Skill Level: Intermediate
📈 Topics Covered: Options hedging, long stock protection, protective puts, breakeven math, risk management