• An option granting the right to sell the underlying futures contract. Opposite of a call.

• An option that gives the holder the right to sell the underlying security at a specified price during a fixed time period.

• (1) An option contract giving the owner the right to sell a specified amount of an underlying security at a specified price within a specified time. (2) The act of exercising a put option. See also: Call.

 Embedded terms in definition
Futures contract
Put option
Underlying security
 Referenced Terms
 American option: An option that may be exercised at any time up to and including the expiration date. Related: European optionAn option that may be exercised at any time during the life of the option. Stock options that trade in U.S. option exchanges, such as the CBOE, are of American types. Index options are of either American (option on S&P100 index, called OEX) or European types (option on S&P500 index, called SPX). See call and Put options.

 Assignment: The receipt of an exercise notice by an options writer that requires the writer to sell (in the case of a call) or purchase (in the case of a Put) the underlying security at the specified strike price.Is the action for the seller of the option of acquiring the opposite position when an option is exercised. When a Put is exercised, the writer receives a long position in securities or a long futures contract. When a call is exercised, the writer receives a short position in the securities or a short futures contract.A voluntary liquidation procedure by which a firm's creditors pass the power to liquidate the firm's assets to an adjustment bureau, a trade association, or a third party, which is designated the assignee.

 Bane: In the words of Warren Buffet, Bill Bane Sr., is, a great American and one of the last real traders around. I like to call him 'Salvo.' His wife, Carol, is a huge NASCAR fan, and in her own words delights in pulling the legs off central bankers. Cooper Bane, son number two, is a thriving artiste who specializes in making art that is much better than the stuff most folks are doing. Jackson, son number three, is a world renowned master chef and plans on opening a restaurant. Bill Bane Jr., son number one, plans on giving Mr. Monroe Trout a run for his money. [Bill Bane, Jr. helped Professor Harvey Put the hypertextual glossary together while an MBA student at Duke University.]

 Bank guarantee letter: Is a document by which an approved bank certifies that an Put option writer or grantor has sufficient funds at the bank to cover the write. The funds are equal to the exercised value of the put. This value is equal to the strike price multiplied by the number of shares. It effectively reflects an outright purchase of the underlying security at the strike level.

 Bearish: Pessimistic. Someone who is bearish may buy Put options.

 Related Terms

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