A bullish option strategy which involves buying shares of stock and writing put options against them. In other words this strategy consists of a long stock and a short put. Because buying shares and selling puts are both bullish strategies, put overwriting is also a bullish strategy. For example, this strategy may be established by buying the share of a given company at $100 and writing a $99 put on the same share. The maximum gain from the short put is the option premium, while losses can be unlimited if prices move unfavorably.

This strategy is also known as a protective put.

For more on put overwriting, see: “put overwriting: an example“.