put option

(redirected from Put options)
Also found in: Dictionary, Thesaurus.

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.
With the share buyback via put options, Walter Meier will acquire up to 25 percent of the share capital currently outstanding.
However, call and put option buyers are willing to pay more as the chances of prices moving in any direction are high.
Fully investigating these put option purchases, by contrast, has the potential to unearth networks behind these attacks.
The banker comes back with an option strategy that offers a significantly reduced option premium up-front, because it combines a written call option with a purchased put option.
The put options with strike prices of Rs 4,350 and Rs 4,600 are available at Rs 25 and Rs 70, respectively.
However, by using a combination of call and put options one can use volatility to one's advantage.
The USDA program pays the cost (premium) of put options and $.
indicates that it is unlikely that all of the Put Options will be submitted.
About five times the normal volume of HGSI put options with less than three months to expiration traded today.
The partnership also reported that it has collared most of its forward positions (that is, purchased put options to protect against declines in natural gas costs and, to offset the cost of the put option, sold call options).