put option

(redirected from Putable)
Also found in: Dictionary, Thesaurus, Wikipedia.

Put option

This security gives investors the right to sell (or put) a fixed number of shares at a fixed price within a given period. An investor, for example, might wish to have the right to sell shares of a stock at a certain price by a certain time in order to protect, or hedge, an existing investment.

Put Option

An option contract in which the holder has the right but not the obligation to sell some underlying asset at an agreed-upon price on or before the expiration date of the contract, regardless of the prevailing market price of the underlying asset. One buys a put option if one believes the price for the underlying asset will fall by the end of the contract. If the price does fall, the holder may buy and resell the underlying asset for a profit. If the price does not fall, the option expires and the holder's loss is limited to the price of buying the contract. Put options may be used on their own or in conjunction with call options to create an option spread in order to hedge risk.

put option

See put.

Put option.

Buying a put option gives you the right to sell the specific financial instrument underlying the option at a specific price, called the exercise or strike price, to the writer, or seller, of the option before the option expires.

You pay the seller a premium for the option, and if you exercise your right to sell, the seller must buy.

Selling a put option means you collect a premium at the time of sale. But you must buy the option's underlying instrument if the option buyer exercises the option and you are assigned to meet the contract's terms.

Not surprisingly, buyers and sellers have different goals. Buyers hope that the price of the underlying instrument drops so they can sell at the exercise price, which is higher than the market price. This way, they could offset the price of the premium, and hopefully make a profit as well.

Sellers, on the other hand, hope that the price stays the same or increases, so they can keep the premium they've collected and not have to lay out money to buy.

put option

see OPTION.

put option

see OPTION.
References in periodicals archive ?
First, since the probability of asset substitution is greater for firms with more growth opportunities (which tend to be riskier firms), this hypothesis predicts that such firms are more likely to issue putable rather than ordinary convertibles (H1).
A Plan for Reducing Future Deposit Insurance Losses: Putable Subordinated Debt," Federal Reserve Bank of Atlanta, Economic Review (July/August), pp.
50 billion in structured quarterly putable borrowings, funded by the sale of $8.
6 billion is due; however, approximately $600 million of the company's zero coupon notes due 2036 are putable by the holders of the notes starting in 2010.
April 3, 2008 /PRNewswire-FirstCall/ -- The interest rate on the Tennessee Valley Authority 1999 Series A Putable Automatic Rate Reset Securities bonds, traded on the New York Stock Exchange under the symbol "TVE," will be reset from 5.
875% convertible debentures due 2024 become putable by noteholders on Dec.
6 million of its zero coupon convertible subordinated notes first putable June 2008 and $175.
However, Fitch also notes that there has been a rise over the last few months of issuers utilizing bond anticipation notes (BANs), as well as extendable maturity commercial paper (ECP), and other putable instruments without liquidity/enhancement support.
May 5 /PRNewswire/ -- The coupon rate on the Tennessee Valley Authority 1998 Series D Putable Automatic Rate Reset Securities (PARRS), traded on the New York Stock Exchange under the symbol TVC , will be reset from 5.
today announced that it has completed its offer to exchange its outstanding Zero Coupon Convertible Subordinated Notes Due 2033, First Putable June 15, 2008 (the "Old 2008 Notes"), and Zero Coupon Convertible Subordinated Notes Due 2033, First Putable June 15, 2010 (the "Old 2010 Notes," and together with the Old 2008 Notes, the "Old Notes"), for an equal amount of the Company's Zero Coupon Convertible Subordinated Notes Due 2033, First Putable June 15, 2008 (the "New 2008 Notes"), and Zero Coupon Convertible Subordinated Notes Due 2033, First Putable June 15, 2010 (the "New 2010 Notes," and together with the New 2008 Notes, the "New Notes").
This appeared indis putable when we got off at Lambeth North tube station, walked along Lambeth Road, and looked out of our hotel room window at a neighbouring Lambeth Palace.
The transaction utilizes a putable note, issued by the European Bank for Reconstruction and Development and underwritten by Swiss Re Capital Markets, as collateral for each Class.