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Description

Holding stock, buying a Put for protection, and selling a Call to offset cost.

Trading Logic

Low-cost protection strategy that caps both upside and downside.

Practical Example

Own stock at $150, buy $140P ($4), sell $160C ($4).

P/L Curve

Chart Description
  • X-Axis: Stock price at expiration
  • Y-Axis: Expected P/L ($)
  • Green area: Profit; Red area: Loss