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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



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