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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1203  
Subject: Re: Stumbling Cub questions Date: 8/12/2002 3:30 PM
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I wrote, Second, what are "married puts"? Married puts are puts you sell against short positions in your account. It's the reciprocal of a covered call. Not every broker that offers options offers married puts.

Woops. This was incorrect. (Sorry. Like I said, I'm pretty much a novice when it comes to options.) Zman49 has it correct. ( http://boards.fool.com/Message.asp?mid=17670946 ) Here's a page on Investopia that covers the topic ( http://www.investopedia.com/articles/optioninvestor/080101.asp ).

Clearly, a married put is an insurance contract that protects your investment in a security. For a premium, it guarentees your ability to sell your shares at a minimum price within a specified time frame. This is unlike a covered call, which is designed to garner additional income while holding a security; but if anything, increases your exposure.

Ironically, it's not really necessary to exercise the put to recover your losses. If the security drops significantly in value, you can simply sell the put since it will have gone up an equivalent amount, once it's in the money.

- Joel
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