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What is a Married Put? Definition, Formula, and Example

A married put is an options strategy where an investor buys shares of a stock and simultaneously buys a protective put option on the same shares, capping downside while preserving unlimited upside.

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What is a Married Put?

A married put is a position consisting of 100 shares of stock purchased simultaneously with one at-the-money or out-of-the-money put option on that same stock. The put acts as an insurance policy: it guarantees the right to sell the shares at the strike price until expiration, no matter how far the stock falls. The position's risk profile is identical to a long call option — limited downside, unlimited upside — which is why the married put is sometimes described as "buying a call with the stock attached." It is the purest form of hedged stock ownership.

How the Married Put Works

The structure and its key numbers:

  • Position: Long 100 shares + long 1 put (same underlying, 100-share contract multiplier).
  • Maximum loss = (Stock Purchase Price − Put Strike) + Put Premium, per share.
  • Breakeven = Stock Purchase Price + Put Premium.
  • Maximum gain = Unlimited; the stock can rise without bound and the put simply expires worthless.
  • Cost of insurance = the put premium, which is a drag on returns if the stock rises or moves sideways.

By put-call parity, long stock + long put = long call + cash, so a married put at strike K is economically equivalent to a call option at strike K plus the present value of the strike in cash.

Worked Example

An investor buys 100 shares of NVDA at $180 and simultaneously buys one $170-strike put expiring in 90 days for $6.00 ($600 total).

  • Maximum loss: ($180 − $170) + $6 = $16 per share, or $1,600 — no matter if NVDA falls to $100.
  • Breakeven: $186.
  • If NVDA rallies to $220 at expiration: the put expires worthless; profit = ($220 − $180) − $6 = $34/share, or $3,400.
  • If NVDA drops to $150: the investor exercises the put, selling at $170; loss is capped at the same $1,600.

Compare with owning the stock unhedged: the drop to $150 would cost $3,000. The $600 premium bought $1,400 of protection in that scenario.

When Traders Use Married Puts

  • Concentrated positions: employees or founders holding large single-stock positions who want to stay long but cannot tolerate a drawdown.
  • Event risk: holding through earnings, FDA decisions, or court rulings where a gap-down is possible but the trader wants upside if the news is good.
  • New positions in volatile names: entering a high-beta stock with defined risk from day one.
  • Tax management: hedging appreciated shares without triggering a sale.

Limitations and Common Misconceptions

  • The put premium is a real, recurring cost. Continuously married-putting a portfolio in low-volatility regimes bleeds returns.
  • The hedge expires. When the put lapses, protection ends unless rolled — and rolling costs more premium.
  • Implied volatility determines the insurance price. Buying a married put when IV is elevated (right before the event you're worried about) means paying the highest possible price for protection.
  • A married put is not a free hedge; it converts an uncertain large loss into a certain small loss. Traders who would simply sell on a breakdown are often better served by a stop-loss than by paying for a put.