Protective Put
In plain English
Insurance for a position you own. You pay a small premium for a put that pays out if the price crashes — like paying for car insurance so a big accident does not wipe you out. You keep all the upside, minus the insurance cost.
How it's built
Own the underlying and buy a put as insurance against a fall.
Illustrative payoff at expiry on a NIFTY-like underlying (spot 24,000, 7d, 13% IV). The shape is the point — open it in the Strategy Lab to tune spot, time and volatility live.
Max profitUnlimited
Max loss₹13,959
Net premiumDr ₹7,459
Breakevens—
When to use it
You are long and want a defined downside before an event (results, budget) without selling your position.
Max profit
Unlimited on the upside (minus the put premium paid).
Max loss
Limited to (entry − put strike) + premium paid.
Common mistakes
- Buying puts only after a fall has begun (expensive IV).
- Over-insuring and bleeding theta every day.