Married Put Options Trading Strategy: How To Implement It?

What Is a Married Put?

A married put is an options trading strategy where the investor purchases an at-the-money put option and holding a long position in a stock simultaneously, on the corresponding stock to protect against uncertainty in the stock’s price.

The married put strategy is normally applied when the trader is bullish on a stock, wants to get the benefits of stock ownership like dividend, bonus, voting rights, but wary of risks in the near term.

How The Married Put Works

The married put works like an insurance policy for traders. It is a bullish options trading strategy used if the investor is concerned regarding potential near-term volatility and uncertainty in the stock.

By holding the stock with a married put option, the investor yet gets the benefits of stock ownership in contrast just holding a call option, which does not reward like the stock ownership.

However, if that stock slips below the strike price, the trader has the benefit of several choices, like exercising the put option during the expiry to get profit from the option contract. The bullish investors may keep the stock and sell the put and bearish investor sell them both.

Also Read: Covered Call Options Trading Strategy

When to Use a Married Put

When investors are very bullish on a stock but fear an upcoming event or uncertainty, they implement the Married Put options trading strategy. Moreover, the married put is a capital-preserving strategy rather than a profit-making strategy.

Certainly, the cost of the put portion of this strategy converts into a built-in cost. The put option reduces the profitability in this strategy if the underlying stock moves higher. So, investors should use married put options strategy as an insurance policy against near-term volatility in a bullish stock, as a protection against price collapse.


The married put strategy is a hedge against a temporary decline in the stock’s price. The married put buyer holds the upside potential of the stock while checking the downside risk and volatility.

So, here is the maximum loss, maximum gain, and break-even point for the married put strategy.

Married Put

Maximum Loss

  • Maximum Loss = Stock Buying Price – Strike Price – Premium Paid

The maximum loss in this strategy is limited, and investors only incur a loss if the stock price falls sharply, but the protective put will save the investor from the greater loss.

The total loss will depend on the holding price of the stock, the strike price of the put option, and the premium paid for the option. If the holding price of the stock was the same as the strike price of the option, then the maximum loss would be the premium paid for the put option.

Maximum Gain

  • Maximum Gain = Stock Price During Expiry – Stock Buying Price – Premium Paid

Theoretically, the maximum potential gains on this strategy are unlimited. If the stock surges sharply, it does not matter even if the put expires at zero, investors will get a very good amount of profit from the stock.


  • Breakeven = Starting Stock Price + Premium Paid

Generally, there is no certain formula for the breakeven point, but you can calculate it with a real example.


Suppose a trader is very bullish on a certain stock ABC but concerned about near term risks. He builds a married put strategy by purchasing shares of ABC stock at $102 in June while concurrently buying SEP 100 put options trading at $2 for hedging purposes.

Maximum loss occurs if the stock price falls to $100 or below during the expiration period. With the SEP 100 puts in place, even if the stock price dive to $80, The total value of holding will still be $100. Therefore, the maximum loss is limited to $2 in stock and $2 in the put option equaling $4.

On the upper side, there is theoretically no limit to the profits. Assume the stock price shoot up to $140, his profit will be $38 in stock and a loss of $2 in the put option equaling $36.

Yet, if the stock price settles unchanged at expiration, the trader will lose $2 in the put option.


Investors who are thinking of married puts because they cannot sell the stock immediately but are worried about its prospects, it’s necessary to make sure that a put hedge is the best answer from all viewpoints.

Novice investors may get benefit from perceiving that their possible losses in the stock are limited. This strategy will give them confidence as they learn more about different options trading strategies.


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