A married put strategy is an options trading strategy that involves buying shares of a stock and simultaneously purchasing put options on the same stock. The purpose of this strategy is to provide downside protection to the investor's stock holdings. Here's how the married put strategy works:

1. Buy Stock: The investor purchases shares of a particular stock. This is a bullish position, as the investor expects the stock's price to increase.

2. Buy Put Options: Simultaneously, the investor buys put options on the same stock. A put option gives the holder the right, but not the obligation, to sell the underlying stock at a predetermined price (strike price) before or at the option's expiration date.

   • The strike price of the put option is typically chosen based on the level at which the investor wants to limit potential losses.
   • The expiration date of the put option depends on the investor's outlook and the duration of protection desired.

3. Purpose: The primary purpose of the married put strategy is to protect the investor from potential losses in the stock's value. If the stock price declines, the put option provides a floor or a minimum selling price for the stock.

4. Cost: The downside of the married put strategy is that it involves the purchase of both the stock and the put option, making it more expensive than simply buying the stock alone. The cost of the put option is essentially an insurance premium paid to protect against potential losses.

5. Profit Potential: While the primary goal is downside protection, the investor still participates in any potential upside movement in the stock. If the stock price increases, the gains from the stock position can offset the cost of the put option.

6. Risk Management: The maximum risk in this strategy is limited to the total cost of purchasing the stock and the put option. This risk is incurred if the stock price decreases significantly, and the put option is exercised to sell the stock at the predetermined strike price.

It's important to note that while the married put strategy provides protection against downside risk, it comes at a cost. Investors should carefully consider their outlook for the stock, their risk tolerance, and the cost of implementing the strategy before using it. Additionally, options trading involves risks and may not be suitable for all investors. It's advisable to consult with a financial advisor before implementing such strategies.