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 ?
* At 12:24 p.m., a trader sold another 652 Netflix put options, this time with a $220 strike price expiring on March 20, 2020 near the bid price at $8.008.
It is why most put options tend to be more expensive than equivalent call options.
Large institutional money managers tend to purchase put options over call options by a ratio of 2:1.
"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.
ICBC has recently completed RMB/foreign exchange put option transactions for multiple corporate clients, becoming one of the first commercial banks in China offering such business.
“Most financial advisors won't suggest selling OTM Put Options when working with investors to create a well-balanced portfolio because they likely know very little about option trading.
The new accord simply accelerates the expected exit of Sawiris, who had a put option to sell out to France Telecom starting in September 2012.
Therefore, the government guarantee makes put options on the financial sector index "cheap" relative to put options on its member banks.
Further, we find no support for the hypothesis that bearish investors substituted put options for short selling on a wholesale basis following the introduction of put options as required by the Chen and Singal hypothesis.
Demand was USD1.96bn, down from USD2.99bn in the auction for June put options and USD3.53bn for the May options.
Call and put options can be used to either speculate on the moves in the market or to hedge your investments against a decreasing market.
Strategies using both linear hedging (selling weather forwards and/or futures short positions) and nonlinear hedging (buying weather put options long positions) are allowed.