How to peg your downside risk by purchasing put options

A protective put is also a bullish strategy but it comes with in-built insurance

Options on stocks and indices are asymmetric in nature in the sense that the buyer and the seller have different risk-return payoffs. While the buyer of the option has limited risk and unlimited returns potential, the seller of the option has limited return potential but unlimited risk. It is this asymmetric nature of options that makes them amenable to permutations and combinations so that very granular and specific strategies can be created. One such strategy is a protective put. In a protective put you buy futures and limit your downside risk by attaching a put option. However, on the up