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 ?
Puttable/Non-puttable ordinary shares (puttable/non - puttable common stock)
As a matter of fact, convertible bonds existing in the financial market have some banned puttable period.
Of the total proceeds raised through convertible bonds during 1991, roughly half were zero coupon, puttable convertibles.
If exercise of such a put right would require the entity to repurchase shares issued under the share-based compensation arrangement, the shares shall be accounted for as puttable shares.
The figures included accretion of Class A callable puttable stock totaling $260.8 million this year, compared with $116 million last year.
Wall, Larry D., 1989, A Puttable Subordinated Debt Plan for Reducing Future Deposit Insurance Losses, Federal Reserve Bank of Atlanta Economic Review (July/August), 2-17.
These callable/puttable bonds effectively bundle an interest rate option with a puttable debt instrument.
Since a portion of puttable common stock is treated as equity, it is treated less like a liability than is the 100-year MRPS in the prior example, even though the puttable common stock reduces the solvency of the firm to a far greater extent.
Wall's plan is to have banks issue and maintain "puttable" sub-debt equal to 4 percent to 5 percent of risk-weighted assets.
Joseph Haubrich (1998), an advocate of puttable subordinated debt, observes that some proposals, presumably including his own, "take important actions out of the regulators' hands....
A Puttable Perpetual FRN is repayable at the investor's option after a specified time period has elapsed.
Some proposals have other special features, such as making the debt puttable, that is, giving investors the right to sell the debt back to the bank at a previously specified price.