put option


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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 ?
If you've been shorting WTI while at the same time going long put options, you'll have made a lot of money in the last few weeks.
Risk-free rate: If one assumes the risk-free rate to rise independently of the underlying security's price, it will increase the value of a call option and decrease the value of a put option.
Therefore, it devises strategies to reduce the impact of this exposure by purchasing yen put options.
As a result, Notes with respect to which the Put Option is not exercised prior to the Expiration Date (or with respect to which the Put Option is exercised and subsequently withdrawn prior to the withdrawal deadline) and that are not surrendered for conversion prior to 5:00 p.
The cost in the bear put spread is Rs 2,250, which is the difference between the cost of the put option purchased (50x70=Rs 3,500) and the amount received from selling the put option (50x25=Rs 1,250).
T subsequently acquires an at-the-money put option on 50 shares.
The next put option repurchase date for holders of the Notes is October 1, 2017.
In addition, Cameron's company notice to holders (a copy of which will be attached as an exhibit to such Schedule TO) with respect to the Put Option specifying the terms, conditions and procedures for exercising the Put Option will be available through The Depository Trust Company and the paying agent, which is U.
Long Straddle: This strategy involves buying a call and a put option with the same underlying security, expiry date and strike price.
2002-66, the Service held that if a grantor of a qualified covered call option (QC) holds a put option on the same underlying equity, the purchased put will cause the stock and the QC to be part of a larger straddle and ineligible for the Sec.
The opportunity to surrender the Notes for purchase pursuant to the Put Option commences today and expires at 5:00 p.
By purchasing put option spreads rather than standalone put options, the Fund can lower the net cost of its market hedging activities, since the premiums received from selling index put options will offset, in part, the premiums paid to purchase the index put options.

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