A producer that uses options to reduce downside risk is buying a "protective put."

Name: A producer that uses options to reduce downside risk is buying a "protective put."
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A protective put is an options strategy where a producer buys a put option as a form of insurance against a potential price decline in the underlying asset. By owning a protective put, the producer can limit their downside risk in case the market moves against them.

A Producer That Uses Options to Reduce Downside Risk Is