# Buying ETH put options

This is called the protective put strategy. Buying a protective put involves buying one put for every ETH already owned. This put guarantees the owner the right, but not the obligation, to sell ETH at the strike price at any time until the option expires, no matter how low ETH declines in value. And just as with other forms of insurance the owner pays a premium for this protection, the premium paid for the put.

### Example

Let’s assume ETH is currently trading at $208. You own 300 ETH and you don’t necessarily want to sell your ETH, but you want to limit your losses if it were to drop below $200. To hedge this position, you could buy 300 puts with a $200 strike price for $3 and pay $900 to have the ability to sell your 300 ETH at $200 if the price of ETH were to drop below that amount. With the protective put, you pay a premium to have the right to sell your ETH in case the price declined or there was a dip in the markets before the expiration.\
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There are two things to keep in mind when buying put options to protect an ETH position. First, you can wait and see how ETH price performs for as long as you want, up to the end of the life of your option. Second, even if ETH drops below $200, you may not want to sell it right away. You can wait to see if the price rebounds. That’s something you can’t do with stop orders.\
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However, keep in mind that the security does come at a cost since you pay a premium to own the put.<br>


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