When you purchase a put option while still holding the underlying stock, it is known as a ________.
A) protective put
B) protective call
C) speculative put
D) speculative call

Question

Quizplus · Accepted Answer

Purchasing a put option while still holding the underlying stock is known as a protective put. This is because the put option provides a level of protection against the stock's decline in value.

When You Purchase a Put Option While Still Holding the Underlying