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CFA Level 3
Derivatives & Currency Mgmt

Objective of Protective Put Strategy

Very Easy Derivative Strategies Option Strategies

ABC Corporation is considering implementing an options strategy to hedge against potential declines in its stock price. The finance team is evaluating two potential strategies: a protective put strategy and a naked call strategy. In a protective put strategy, an investor buys a put option while simultaneously holding the underlying asset. What is the primary objective of using a protective put strategy?

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