Options Glossary

Glossary: Protected Strategy

Last Updated: July 12, 2015


Protected Strategy

What Does Protected Strategy Mean in Options Trading?

A type of trading strategy that is hedged with options and futures so as to make it a very small risk trade. The stock holdings can be protected by buying corresponding number of puts of the same stocks so as to protect the investment in case the market falls down substantially. With this strategy the fall in stock price is offset by gain in the long put(s).

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