A Protective Put is an options strategy wherein a trader buys (or already owns) 100 shares and also buys 1 at the money OR out of the money Put (one contract per 100 shares) The purpose of a Protective Put is to offset any losses on the shares from short-term volatile downward movement. The theory is that as the shares lose money on a downward spike or pullback, the protective Put will gain money, thus offsetting losses incurred on the shares.