Finance glossary
Put Option
Definition
A contract giving the right to sell an asset at a set price before expiration.
A put option gives the holder the right, but not the obligation, to sell an underlying asset at the strike price before expiration. Buyers profit when the price falls below the strike minus premium. Puts are used to bet on declines or to hedge a portfolio against losses.
In a sentence
Worried about a sell-off, she bought a put option that would pay off if the stock fell.
Get a word like this every morning
Word of the Day on your Home Screen, with quizzes and flashcards. Get the app →