Definition
A married put is a strategy in which a trader holds shares of a stock and simultaneously buys a put option on that same stock, usually one put per 100 shares. The put is purchased at or near the time the shares are acquired — hence "married" to the position.
The put functions as insurance. It guarantees the holder the right to sell the shares at the strike price, no matter how far the stock falls.
Why it matters
How it works
If the stock falls, the put gains intrinsic value, offsetting the loss on the shares. Below the strike, the holder is fully protected: any further decline in the stock is matched by a rising put, so the floor is set at the strike price minus the premium paid. If the stock instead rises, the put expires worthless, but the shares appreciate freely — the investor simply loses the premium, much as one loses an unused insurance payment.
The married put is most attractive when an investor wants to keep a stock for the long term but is wary of a near-term shock. The recurring cost of buying protection makes it expensive to run permanently, so it is often used selectively, around periods of elevated risk.