Are you tired of constantly worrying about the ups and downs of the stock market? Do you want to protect your hard earned investments while still earning a passive income? If so, the protective put strategy may be the perfect solution for you.
The protective put strategy is a simple yet effective way to insure your stock investments against potential losses. By purchasing put options on your stocks, you can protect yourself from any significant price drops while still allowing your investments to grow.
So how does it work? Let's say you own 100 shares of a stock that is currently trading at $50 per share. You are worried that the stock may decline in value, but you don't want to sell it and miss out on any potential gains. By purchasing a put option with a strike price of $45, you have the right to sell your shares at that price no matter how low the stock's price may go.
This means that even if the stock drops to $40 per share, you can still sell your shares for $45 each, effectively limiting your losses to just $5 per share. And the best part is that you can continue to hold onto your stock and earn any dividends or price appreciation that may occur.
The protective put strategy is a great way to insure your stock investments while still earning a passive income. It allows you to sleep soundly at night knowing that your investments are protected against any significant losses. So why not give it a try and start insuring your stock investments today? Your financial future will thank you for it.