Married Put
A married put is a strategy where someone buys shares of a stock and, at the same time, buys a put option on that same stock. The two positions are entered together, as a pair, which is why they are described as "married" to each other.
The put option is the important piece here. A put gives its owner the right to sell a specific number of shares at a set price (called the strike price) before a certain date. By owning a put alongside the stock, the trader has essentially bought insurance: if the stock price falls sharply, the put gains value and offsets the loss on the shares, because the trader can still sell at the strike price no matter how far the stock has dropped.
The nuance that trips people up is that a married put does not eliminate risk, it caps it, and only for a limited time. The put has an expiration date, so the protection runs out unless a new put is bought to replace it. There is also a cost: the price paid for the put (the premium) reduces overall profit if the stock rises, and is simply lost if the stock does not fall enough to make the put worth exercising. So a married put trades away some upside, and some cash upfront, in exchange for a known floor on the downside.
People sometimes confuse a married put with a protective put. They describe the same mechanics, but "married put" specifically refers to buying the stock and the put on the same day as a paired transaction, which historically also mattered for tax treatment in the US. A protective put more loosely refers to buying a put against stock already held, regardless of timing.
This term depends on a rule or threshold that changes over time, so no specific figure is quoted here. The definition references historical US tax treatment tied to same-day purchase of stock and put ('married' status affecting holding period and loss deferral rules). This entry avoids stating specific tax rules or holding-period numbers; a human should confirm current IRS treatment of married puts (e.g. straddle rules, holding period effects) against current IRS guidance before publishing if tax treatment is going to be discussed further.
A day trader who takes a large or leveraged stock position intraday can use a married put to define the maximum possible loss on that position in advance, which matters most around earnings, news, or other events where a stock could gap sharply against them before they can react.
A trader buys 100 shares of a stock at $50 and, at the same time, buys one put option with a $48 strike expiring in a month for a premium of $1.50 per share ($150 total for the contract covering 100 shares). If the stock drops to $40, the shares are worth $10 less each, but the put allows the trader to sell at $48, limiting the loss on the stock side to $2 per share, or $200, plus the $150 already paid for the put. If the stock instead rises to $60, the trader keeps the stock gain of $10 per share, minus the $150 spent on the put that expires worthless.
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