A married put, or protective put, is a popular options trading strategy that provides an investor with a safety net in the event of a dramatic and sometimes detrimental stock market price drop. By purchasing a put option and entering into a simultaneous transaction, or “marriage,” with a stock purchase, the investor has the peace of mind and security of having the protection of the put option.

A put option gives the owner the right, but not the obligation, to sell a specified number of shares of a security, most commonly stocks, at a predetermined price - the strike price - on or before the option’s expiration date. In contrast to a call option, which gives the buyer the right but not the obligation to purchase stock, a put option price will increase as the stock price drops. This means if a system of puts, or even just a single put, is entered into at the same time as a stock purchase and held throughout the duration of the option, the investor is essentially shielded from the effects of adverse downturns in the stock market.

The married put strategy works best when the underlying stock is expected to remain relatively stable and is ideal when anxiety over sudden, shocking news or an unexpected market reaction is a concern. Put options vary in price according to the volatility of the underlying stock, the strike price compared to the stock price, and the time until expiration, so before executing a married put the investor needs to carefully consider these elements to make an informed decision. There is an additional cost associated with the option, and for active traders, this cost can become prohibitively expensive.

In general, long-term investors do not need to implement a married put strategy because they should be focused on the long-term prospects of the investment rather than short-term price fluctuations.