Definition Put Option. Description.
A Put Option is an option that gives the buyer the right,
but not the obligation, to sell the underlying stock, commodity, or other
financial instrument at a set time and strike price from the writer (seller)
of the put option. Normally, one option contract for a stock confers the right
to sell 100 shares of the underlying stock.
The writer must buy the commodity or financial instrument
should the buyer so decide. The purchaser pays a premium (a fee) for this
right.
The purchaser of a put option expects the price of the commodity/instrument
to decrease in the future; the writer expects that it will not, or he is willing
to give up some of the upside (profit) from a price decrease in return for
the premium plus still having the opportunity to make a gain up to the strike
price.
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Quotes on Put Options. Quotations
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Put Options Special Interest Group
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Compare with:
American-Style Option
| European-Style Option
| Call Option |
Asian Option |
Real Options |
Futures Contract |
Hedge |
Warrant
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