An investor holds a long stock position and buys a put on that stock to limit downside risk. This is known as:

Giải thích

Buying a put while owning the underlying stock is a protective put, functioning like insurance: if the stock falls, the put gains value and limits the loss, while the upside on the stock remains open (less the premium paid). It is a hedging strategy for a bullish investor worried about a near-term decline.