Married Put Strategy 2025: Protect Your Portfolio in Volatile Markets

Australian investors are no strangers to market swings, but 2025 is shaping up as a year of both opportunity and risk. With uncertainty around interest rates, global growth, and local policy shifts, protecting your portfolio is more important than ever. One classic risk management tool that’s gaining renewed interest is the married put—a strategy that lets you stay in the market while capping your downside risk.

What Is a Married Put?

A married put is a simple but powerful options strategy. It involves buying shares of a stock and simultaneously purchasing a put option on the same stock. The put option acts as insurance: if the share price falls below a certain level (the strike price), the put increases in value, offsetting your losses on the stock.

• Example: Suppose you buy 1,000 shares of CSL Ltd at $300 each and simultaneously buy 10 put contracts (each covering 100 shares) with a strike price of $280, expiring in three months. If CSL’s share price drops to $250, your put options rise in value, limiting your total loss.

This strategy is called ‘married’ because the put is “wedded” to the stock purchase—you don’t separate the two.

Why Married Puts Are Relevant in 2025

Several factors make married puts especially attractive for Australian investors this year:

• Interest Rate Volatility: With the RBA’s cash rate likely to see continued adjustments as inflation and economic growth fluctuate, equities could experience sharp swings.
• Global Uncertainty: Ongoing geopolitical tensions and shifting trade policies continue to roil international markets, impacting ASX-listed companies with overseas exposure.
• New ASX Options Accessibility: In 2025, the ASX expanded its suite of exchange-traded options (ETOs), making it easier for retail investors to access puts on more blue-chip stocks and ETFs.
• Capital Gains Tax (CGT) Planning: The May 2025 Federal Budget introduced subtle tweaks to CGT rules, putting a premium on strategies that allow for risk control without triggering unwanted taxable events.

With these dynamics at play, more Australians are turning to married puts as a way to stay invested in growth assets without leaving their portfolios exposed to the full brunt of market downturns.

How to Structure a Married Put: Practical Steps

Here’s a step-by-step guide for implementing a married put in the Australian market:

1. Choose Your Stock: Select a share you want to hold for the medium to long term—often a blue-chip like BHP, CSL, or a major bank.
2. Buy Shares: Purchase the desired number of shares through your brokerage account.
3. Buy a Put Option: On the same day (or within the same week), buy a put option with a strike price near or just below your purchase price. Choose an expiry that matches your investment horizon—often three to six months out.
4. Monitor and Adjust: Track both the stock and the put. If the share price rises, your put may expire worthless (that’s the ‘insurance premium’ you pay for peace of mind). If the share price falls, the put cushions your losses, allowing you to decide whether to sell, roll your options forward, or simply hold through volatility.

This approach is ideal for investors who want to participate in potential share price gains but are unwilling to risk substantial capital during periods of heightened uncertainty.

Married Put in Action: A 2025 Case Study

Let’s say you’re bullish on Macquarie Group (MQG) but wary of short-term downside risk. MQG shares are trading at $180. You buy 500 shares and simultaneously purchase 5 put contracts with a $170 strike price, expiring in four months. The total premium for the puts is $2,250 ($4.50 per share).

• If MQG rises to $200, your puts expire worthless, but your shares gain $10,000 in value (minus the $2,250 insurance cost).
• If MQG falls to $150, your puts gain $10,000 in value, offsetting the $15,000 loss on your shares. Your net loss is capped at the cost of the puts.

This limited-risk approach provides comfort in uncertain times, making it a valuable tool for both novice and experienced investors.

Key Considerations Before You ‘Marry’ a Put

• Cost: The main downside is the upfront cost of the put premium. In a calm market, this can feel like wasted money if your insurance isn’t needed.
• Tax Implications: 2025’s ATO guidance confirms that the premium paid for protective puts is added to the cost base of your shares for CGT purposes, potentially reducing your taxable gain if you later sell at a profit.
• Liquidity: Some ASX stocks have limited options trading volume. Focus on widely held names for best pricing and execution.
• Brokerage and Fees: Not all brokers offer options trading, and some charge higher fees for multi-leg strategies. Compare costs before executing.

Is a Married Put Right for You?

In 2025’s environment of fast-changing headlines and policy moves, the married put stands out as a flexible way to stay invested without sleepless nights. It’s not a free lunch—there’s always a cost to protection—but for many Australians, it’s a price worth paying to guard against the unexpected.