protected strategy

Protected Strategy

A position that has limited risk. A protected short sale (short stock, long call) has limited risk, as does a protected straddle write (short straddle, long out-of-the-money combination). See also Combination and Straddle.

protected strategy

An investment strategy with a goal of limiting risk. For example, purchasing a stock and a put on the stock establishes a limit on the amount of money that may be lost since the put protects against losses derived from a declining value of the stock. Although protected strategies limit losses, they also generally penalize potential profits.
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We might also, depending on a minimum account size, add what we call a principal protected strategy, where your capital is preserved.