I am a very new trader. I had an idea today and am certain that it has been done before. If any one has experienced a trade like this please let me know what to expect. If I am leaving something out that is going to cause me to wipe out please tell me that too. Here goes. Stock X is selling for 2.50 3.00 puts for stock X are .75 If I buy equal shares of X and puts of X am I limiting my risk enough to make this a safe trade? I am thinking if X goes up to 3.00 I let the puts expire. I am out 7500 (or whatever) for the puts, but up 5000.00 (or whatever) on the shares I bought. So somewhere around 3.25 I break even. The exact opposit on the down side. If X stays at 2.50 I am out the 7500 I paid for the puts minus the 5k profit I got when I exercised the puts. for a loss of 2500, but if the X stock continues down I break even at 2.25 I am thinking the worst thing that can happen is the stock sits still and I am out 2500. Am I missing something?