Definitions for "downside protection"
A position that limits the potential loss that would result from a decline in...
Downside protection is the amount by which the value of the underlying portfolio of common shares can decline in value before the redemption value of the preferred share is affected. For example, if a split preferred share has downside protection of 50%, it means that the underlying portfolio can decline in value by 50% before the principal value of the split preferred share is affected.
for covered calls the 'cushion' against loss provided by the option premium received
A protective hedge constructed to limit the risk on the value of an investment in the event of a negative downturn in the market or in security prices.