A protective put strategy is
A)a long put plus a long position in the underlying asset.
B)a long put plus a long call on the same underlying asset.
C)a long call plus a short put on the same underlying asset.
D)a long put plus a short call on the same underlying asset.

Question

Quizplus · Accepted Answer

A protective put strategy involves buying a put option to protect against potential losses in the underlying asset. This is done by maintaining a long position in the underlying asset while simultaneously holding a long put option. If the price of the underlying asset falls, the put option will increase in value and offset the losses incurred in the underlying asset.

A Protective Put Strategy Is