Derivatives

Credit Spread Put Option

February 17, 2021
Derivatives

MABO

February 18, 2021

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An option strategy (also a covered put) whereby an investor, holding a long position in stock, purchases a put on the same stock to safeguard against a possible decline in the stock price. The net effect of those two positions determines the outcome (gains or losses) of this strategy. The option and underlying stock are identified on a taxpayer’s records as “married”.

The married put is a special case of a broader option strategy called “protective put“.

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