Married Put: Overview, Example, Uses, Trading Guide, P&L, Risks

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Written by Arjun Remesh | Reviewed by Sunder Subramaniam | Updated on 11 June 2025

The Married Put is a risk management options strategy that combines a long stock position with a long put option on the same stock. Married Put involves purchasing protective put options for an equivalent number of shares already owned, effectively creating a price floor for the investor’s position.

Purchase a married put when you want to protect your long stock position against potential downside losses while maintaining unlimited upside potential. Investors implement this strategy during periods of market uncertainty or when expecting significant price movements due to events like earnings announcements. The strategy works by setting a defined floor price (the put’s strike price) below which losses are contained, regardless of how far the stock price falls.

SEBI regulations govern options trading , requiring traders to meet margin requirements through recognized brokers. The costs include the put option premium and potential opportunity costs if the stock trades sideways.

Analyze the risk-reward carefully before employing this strategy. The married put offers portfolio protection but reduces potential returns due to premium costs. Experienced investors use married puts selectively during high volatility periods rather than as a permanent hedging mechanism.

What is a Married Put?

The Married Put is a risk management strategy used by investors to protect their stock positions against downside risk. Married Put involves simultaneously holding shares of a stock and purchasing put options for the same stock in equal quantities, creating a form of portfolio insurance.

Consider the married put as insurance for your stock investment, similar to how you purchase insurance for your home or car. Investors buy this protection to establish a price floor below which losses are limited, regardless of how severely the stock price falls. The strategy preserves upside potential while defining the maximum possible loss at the outset. 

Create a married put position by purchasing shares of a company and buying put options with the same expiration date for an equivalent number of shares. Pay attention to the cost of implementing this strategy. The put option premium effectively increases your investment cost and reduces your potential return.  investors typically use married puts during periods of high volatility or before significant market events like Union Budget announcements or corporate earnings releases.

Remember that NSE and BSE options contracts  are standardized with specific lot sizes and expiration cycles. Select appropriate strike prices and expiration dates based on your risk tolerance and investment timeframe.

How Does a Married Put Work?

The Married Put is a protective options strategy that works by combining stock ownership with corresponding put options. Married Put functions as a financial insurance policy, establishing a guaranteed selling price for your stock regardless of how far the market falls.

Understand the mechanics through a simple breakdown: you own shares of a stock and simultaneously purchase put options on the same stock with equal share coverage. The put option gives you the right to sell your shares at the strike price until the expiration date. 

Think of Tata Motors shares purchased at ₹600 per share. By adding a put option with a ₹550 strike price for ₹25 per share, you establish a minimum selling price of ₹550 regardless of market conditions. Your effective maximum loss becomes limited to ₹75 per share (₹50 potential stock decline plus ₹25 option premium).

Examine the risk-reward profile closely. The put option creates a price floor, limiting downside risk while preserving unlimited upside potential. The strategy’s cost equals the put option premium paid. This premium effectively increases your breakeven point compared to simply holding the stock alone.

Consider market conditions  before implementing this strategy. Periods of high volatility, such as during national elections or RBI policy announcements, make married puts particularly valuable.  options traders face standard contract specifications on NSE with predetermined lot sizes and monthly expiration cycles.

Analyze the time decay factor carefully. Option premiums erode as expiration approaches due to theta decay. Long-term equity options (LEAPS) provide extended protection but cost significantly more than short-term options. Strike price selection involves balancing protection level against premium costs—lower strikes provide less protection but cost less.

What is an Example of Married Put?

Let us understand married put with an example of an investor who purchases some infosys shares.

An investor purchases 100 shares of Infosys at ₹1,800 per share (total investment: ₹1,80,000) and simultaneously buys one Infosys put option with a strike price of ₹1,700 expiring in three months at a premium of ₹60 per share (total option cost: ₹6,000). The total investment amounts to ₹1,86,000 with a breakeven point at ₹1,860 per share.

Consider three market scenarios to understand the strategy’s performance. In a bullish market where Infosys rises to ₹2,100 at expiration, the put option expires worthless (losing ₹6,000), but the stock gains ₹30,000, resulting in a net profit of ₹24,000. The put option worked as insurance that wasn’t needed.

Evaluate a sideways market where Infosys trades at ₹1,800 at expiration. The stock position breaks even, but the put option expires worthless, creating a loss equal to the premium paid (₹6,000). The protection cost represents the price paid for downside security during the holding period.

Analyze a bearish market where Infosys drops to ₹1,500 at expiration. Without protection, the stock loss would be ₹30,000. However, the put option gains intrinsic value of ₹20,000 (₹1,700 strike minus ₹1,500 market price, multiplied by 100 shares). The net loss becomes limited to ₹10,000 (stock loss minus put option gain) plus the initial premium of ₹6,000, totaling ₹16,000. The married put successfully capped the downside risk.

Why Use a Married Put Strategy?

Investors use the married put strategy to create a safety net for long stock positions while retaining full ownership and unlimited upside potential. The strategy works particularly well for long-term investors who believe strongly in a company’s fundamentals but recognize short-term market volatility risks. Market uncertainties surrounding quarterly results, budget announcements, or global economic events drive investors to seek such protection while maintaining their stock exposure.

Consider the advantage over a standard stop-loss order, which forces an automatic exit during market dips. The married put allows investors to weather temporary price declines without selling their shares. This proves especially valuable in the  market, where stocks like ITC or Bharti Airtel occasionally experience sharp intraday movements that might trigger stop-losses prematurely before recovering. The strategy also protects against gap-down openings where stop-loss orders execute at prices far below their set levels, particularly after negative overnight news.

Look at the benefits during events like national elections or policy changes that create temporary market turbulence.  investors holding fundamentally strong companies utilize married puts to navigate through these volatile periods without abandoning their long-term investment thesis. The strategy offers psychological comfort, allowing investors to maintain positions during market corrections rather than selling at loss due to panic.

Married puts excel particularly in capturing extraordinary upside moves while defining maximum downside risk – a combination rarely achieved through other hedging mechanisms.

When to Use a Married Put?

Implement a married put strategy during periods of anticipated market volatility or uncertainty while wanting to maintain stock ownership. 

Market conditions favoring married puts include high VIX readings (India VIX above 20), indicating expected market volatility, similar to the situation in the chart below.

The strategy becomes particularly relevant during global economic uncertainties that impact  markets, such as US Fed rate decisions or geopolitical tensions affecting crude oil prices. Another ideal scenario occurs after substantial rallies, where investors seek to protect accumulated gains without triggering capital gains taxes through selling.

Risk profiles determine the strategy’s appropriateness. Conservative investors use married puts for core portfolio holdings they intend to keep long-term. Moderate risk-takers employ the strategy selectively during specific volatile periods. Aggressive investors apply married puts to protect concentrated positions in high-beta stocks like Adani Enterprises or Tata Motors that exhibit significant price swings.

The strategy works best for investors with moderate options knowledge who understand the premium represents the cost of protection – similar to insurance that expires worthless in favorable markets but provides invaluable protection during downturns.

How to Trade using Married Put?

To trade using a married put, a trader simultaneously enters a long position in a stock or its futures contract and buys a put option for the same stock and expiry. This contrasts with the protective put, where the stock or futures position is already held and the put is purchased later as a hedge. 

Considering the recent behavior of TCS, which has encountered some bearish pressure but could be poised for profit-taking and a gradual move upward, this stock appears to be an ideal candidate for the married put approach. 

Here, the trader takes a long position in the TCS futures contract while also purchasing a put option at the same time. This combination allows the trader to benefit from any upside in the stock while having solid protection against significant downside risk.

For this example, since the outlook is based on a weekly timeframe rather than on short-term price movements, neither the current expiry contract nor very short-dated options are chosen. Instead, the position is built using the 2nd month futures and a matching at-the-money put option, both set for the same expiry two months ahead. 

The structure of this trade is as follows.

The trader buys one June futures contract of TCS at ₹3,456.4 and simultaneously buys one at-the-money put option with a strike price of ₹3,460, paying a premium of ₹120 per share. The lot size for TCS futures is 175 shares, so the total premium outlay for the put option amounts to ₹21,000. This premium is essentially the cost of protection, representing the maximum amount at risk for hedging the downside.

The beauty of this strategy is that it limits potential losses while leaving the upside open. If the price of TCS drops significantly, the gain on the put option will offset the loss on the futures contract, except for the premium paid. 

The put expires worthless, but the futures position profits from the move. The only unrecoverable expense is the premium paid for the put. In this example, if TCS falls to or below ₹3,460 by expiry, the maximum loss is the net cost of the premium minus the small gain from the future moving up from ₹3,456.4 to ₹3,460, totaling ₹20,370.

The breakeven point for this position is where the profit from the futures offsets the cost of the put option. This occurs at ₹3,576.4, which is the futures entry price plus the premium per share. Rounded, the breakeven is ₹3,577.

To illustrate how this strategy responds to different expiry scenarios, consider the following.

For instance, in case the spot price drops to ₹3,300, the loss on the futures is almost entirely offset by the gain on the put, with the net outcome being a small loss, limited to the premium and minor basis difference. If the spot price is exactly at the strike, the put expires worthless, and the small gain on the future slightly reduces the total premium loss. 

At the breakeven price, gains and costs cancel each other out, resulting in no profit or loss. If the spot price rises to ₹3,700, the put expires worthless, but the gain on the futures more than compensates for the premium paid, delivering a solid net profit.

What is the Maximum Profit & Loss on a Married Put?

The maximum profit for a married put strategy is theoretically unlimited, while the maximum loss is limited to the difference between the stock purchase price and put strike price, plus the premium paid. The profit potential exists because the stock component of the strategy allows for unlimited upside appreciation. 

Any price increase above the breakeven point translates directly into profit. The breakeven point equals the stock purchase price plus the put option premium.

The put option functions as price insurance, creating a protective floor. This differs significantly from owning stock outright, where the entire investment faces risk. Traders calculate the effective cost by adding the premium to the purchase price and the effective floor by subtracting the premium cost from the strike price. The strategy proves particularly valuable for volatile but fundamentally sound  stocks where significant price swings occur regularly but long-term prospects remain positive.

How Option Greeks Affects Married Put?

Option Greeks significantly influence the performance and behavior of a married put strategy through their direct impact on the put option component. Delta represents the rate of change in option price relative to the underlying stock movement. 

In a married put, the stock position has a delta of +1.0, while the put option has a negative delta (typically between -0.2 and -0.5 for slightly out-of-the-money puts). The combined position delta remains positive but less than 1.0, meaning the position moves in the same direction as the stock but at a reduced rate. This reduced sensitivity provides the downside protection characteristic of the strategy.

Theta measures time decay, which steadily erodes the put option’s value as expiration approaches. The married put experiences a constant theta drag, essentially a daily cost for maintaining protection. This decay accelerates in the final 30 days before expiration, particularly affecting at-the-money options.  investors trading Nifty Bank options often notice this acceleration during the last week before monthly expiry dates.

Vega quantifies the option’s sensitivity to volatility changes. Married puts benefit from volatility increases, which enhance the put option’s value. Volatility spikes during events like Wipro’s earnings announcements temporarily increase the put option’s value, potentially offsetting some stock losses. Strategic investors sometimes monetize these vega-driven gains by selling overvalued puts during high-volatility periods.

Gamma measures the rate of change in delta, becoming particularly important during sharp market moves. Rho represents sensitivity to interest rate changes, generally a minor consideration for most  retail investors implementing married puts with short to medium-term expirations.

What are the Risks of Married Put?

The primary risks of a married put strategy include premium erosion, suboptimal option selection, and diminished returns during low-volatility periods. The put option premium represents a guaranteed cost that reduces potential returns regardless of market direction. 

This premium effectively increases the investment cost basis, requiring the stock to rise by the premium amount just to break even. For instance, an investor buying Bajaj Finance at ₹7,000 and paying ₹250 for a protective put needs the stock to reach ₹7,250 before profiting. During sideways markets, this premium cost becomes especially burdensome, essentially acting as a drag on performance.

Selecting inappropriate strike prices or expiration dates compounds risk considerably. Too distant strike prices provide inadequate protection despite lower costs, while excessively close strikes become prohibitively expensive. The risk materializes in either insufficient downside protection or excessive premium outlay. Similarly, expiration timing errors leave positions vulnerable during critical events or force unnecessary premium expenditure for excessive time value.

Low-volatility environments present another significant risk factor. Put option premiums depend heavily on implied volatility. During extended low-volatility periods common in the  market between major events, put premiums decline, making protection seem deceptively inexpensive. 

Tax implications also warrant consideration, as  investors face short-term capital gains tax at income tax rates on profitable options trades held less than one year.

Is Married Put Strategy Profitable?

Yes, the married put strategy proves profitable in strongly bullish markets that overcome the cost of the put premium. The strategy generates returns when stock appreciation exceeds the premium paid for protection. 

Most successful implementations occur when protection is purchased during relative calm before major upward movements. The strategy underperforms in flat or moderately rising markets due to the constant premium drag.  investors typically find optimal results using married puts selectively rather than as a permanent approach.

Is Married Put Bullish or Bearish?

The married put strategy is moderately bullish with a protective component that acknowledges potential downside risks. Investors establish this position by maintaining a long stock position while adding downside protection through a put option. The outlook remains fundamentally optimistic about the stock’s prospects while recognizing the possibility of temporary declines. 

 Investors employ this approach during periods like pre-budget sessions or ahead of quarterly results announcements, expecting positive outcomes but protecting against disappointments. The strategy reflects confidence tempered with prudence. 

What are Alternatives to Married Put Strategy?

Alternatives to the married put strategy include protective puts, collar strategies, stop-loss orders, and synthetic puts. 

Protective put functions identically to a married put but typically applies to existing stock positions rather than simultaneously purchasing stock and puts. Both strategies limit downside risk through put options while allowing unlimited upside potential.

Collar Strategy Combines a protective put with selling a covered call against your stock position. Selling the call offsets the put premium cost, reducing overall protection expenses.  investors often implement collars during market volatility to maintain positions while minimizing hedging costs.

Stop-Loss Orders Execute automatic sells at predetermined prices. Married puts outperform stop-losses during gap-down openings and market halts by guaranteeing the strike price regardless of market conditions.

Synthetic Put Creates equivalent protection by shorting futures contracts against stock holdings. Popular among  derivatives traders seeking cost-effective hedging alternatives in highly liquid Nifty and Bank Nifty contracts.

Each strategy offers different risk-reward profiles while still providing downside protection.