Married Put
A married put is buying a stock and a protective put at the same time, locking in downside protection from day one. Learn how it works and how it differs from a protective put.
A married put is buying a stock and a put option on it at the same time, marrying the two together in one move. The put protects the shares from a drop the instant you own them, so your downside is capped from the very first day.
It is a close relative of the protective put, with one small but meaningful difference in timing. Let me show you.
Insurance Bought With the Shares
Think of a married put like buying a new car and driving off the lot already insured. You did not wait a month and then add coverage. The protection was arranged the same day, so there was never an uninsured moment.
That is the idea. You buy 100 shares and, in the same breath, buy a put to protect them. The put sets a floor under your new position right away. If the stock falls, the put gains value and offsets the loss, exactly like an insurance payout. If the stock rises, you enjoy the gains and simply let the put expire, out only its premium.
Watch It Work
You want to own Apple but are wary of a near-term drop. So you build a married put:
- Buy 100 shares of Apple at $200, or $20,000
- Buy a $190 put for $4 a share, or $400, in the same order
Your floor is $190, and your total cost basis is $204 a share once you include the premium.
Apple crashes to $160. Your shares lost $40 a share, but the put lets you sell at $190. Your loss is capped near $14 a share (the $10 drop to the floor plus the $4 premium), instead of the full $40. The insurance did its job from the start.
Apple rises to $230. Your shares gained $30 a share. The put was not needed, so it expires worthless and you are out the $400. You still profit handsomely, minus the cost of the protection you were glad to have.
Married Put vs Protective Put
The two are nearly identical, and the difference is purely about timing.
A married put is bought together with the shares, in one combined move, protecting a brand-new position from the moment you enter it.
A protective put is typically added later, to shares you already own, when you decide you want protection.
Mechanically they behave the same once in place: both pair long stock with a long put to set a floor. "Married" just emphasizes that the stock and the put were entered as a package. The one honest cost, as always, is the premium, which slightly raises your break-even in exchange for peace of mind.
- A married put buys stock and a protective put together.
- The put sets a floor from day one, like insuring a car off the lot.
- It behaves the same as a protective put, just entered as a package.
- The cost is the premium, which slightly raises your break-even.
Pop Quiz
Three quick questions to see what stuck. Pick an answer and the explanation shows up right away.
What is a married put?
You buy the shares and the put together, protecting the new position from day one.
How does a married put differ from a protective put?
They behave identically once in place. The difference is that a married put is entered as a package with the stock.
You own shares via a married put with a $190 put. Apple crashes to $160. Your floor is?
The put guarantees you can sell at $190 no matter how far the stock falls, so $190 is your floor.
Bottom Line
A married put is protection bought at the altar with the shares themselves. Enter the stock and the put together, and your position is insured from the first day, with a floor at the put's strike and full upside above it.
It is essentially a protective put arranged at purchase rather than added later. The behavior is the same, and so is the honest trade-off: the premium is the price of never having an unprotected moment.
Keep going: the same protection added to existing shares is the protective put, and adding a sold call to cap the cost makes it a collar.