GO
Loading...

Put Options as Protection: CNBC Explains

You may have heard traders talk about buying “put protection” while watching CNBC or hearing financial commentary. Put options are essentially bets that a stock will go down, but they can also be used by investors to hedge their portfolio against a downward move in stock price. How can put options be used as investment insurance? Salman Khan of the Khan Academy explains.

From this video, you’ll understand:

  • What it means to buy “put protection”
  • How the profit and loss of a put option compares to purchasing a stock



Contact CNBC Explains

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More*

Latest Special Reports

  • File photo: Participants at a hacking conference in Germany

    A series of high profile cyber attacks has created huge economic opportunity as businesses look to fend off future attacks.

  • Whether you're young and just getting started investing or moving closer to retirement, factoring in age will keep you ahead of the game.

  • Advisor-centric content with guest columns covering practice management, investment strategies and marketing/social media.

Central Banking Explained

Corporate Accounting Explained