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.
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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

put option

See put.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

put option

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

put option

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
"A Plan for Reducing Future Deposit Insurance Losses: Putable Subordinated Debt," Federal Reserve Bank of Atlanta, Economic Review (July/August), pp.
If FE's competitive generation assets cannot be sold, a restructuring of its competitive business in bankruptcy is likely to be triggered by approximately $500 million of maturing or putable FES debt in 2018 or other factors.
Likewise, Putable is equal to one if the bond is putable and zero otherwise, and should be negatively related to spread if put features reduce the perception of default risk.
Callable is positive and significant in all of the models, while Putable is significantly negative.
In the remainder of 2016, approximately $5.6 billion matures, including $1.8 billion of putable debt that was not put.
This paper presents the first empirical analysis of firms' rationale for issuing putable convertible bonds in the literature.
An additional amount of $49 million (down from $175 million in 2014) is potentially putable to the company upon termination or death of specific employees (which is not included in Moody's leverage calculation).
We exclude putable, convertible, and senior secured bonds.
(12) Perpetual bonds, bonds with credit enhancements, and putable bonds are excluded.
In this model, they price Liquid Yield Option Notes (LYONs), which are zero coupon convertible bonds callable by the issuer and putable by the bondholder.
The selected bonds have the following characteristics: 1) issued on or after January 1, 1995, 2) maturity of at least one year, 3) denominated in US dollars, 4) offering amount of at least $25 million, 5) fixed semi-annual coupon, 6) not asset-backed, 7) not putable, 8) without a sinking fund, 9) not a Yankee bond, 10) not a medium-term note, 11) not part of a unit offering, 12) not convertible, and 13) listed as a corporate debenture.
LYONs are zero-coupon, convertible, callable and putable bonds.