Chapter 17. Married Puts
Every time you buy a stock, you are exposing your investment capital to substantial risk. Fortunately, there is an inexpensive way to protect your investment while waiting for the stock to move up. This protection is established through an “arranged marriage” between your stock and an appropriate put option. In options terminology, this is known as the married put strategy.
As soon as you buy a stock, you are particularly anxious as you wait for it to begin moving upward. Obviously, you bought the stock because you believe its price is going up and you also believe that this upward move is going to happen soon. Even for disciplined investors, it is difficult to get rid of a nonperforming stock within the first few weeks ...
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