Put Option
Definition
What is Put Option?
An option giving the holder the right to sell the underlying assetThe asset, rate, index, or reference on which a derivative's value is based. at the strike priceThe price at which an option holder may buy or sell the underlying asset..
Example in practice
How This Looks in Practice
A put protects a portfolioThe complete collection of investments owned by an investor or managed under one mandate. against a sharp market decline.
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Related Terms
Derivative
A contract whose value depends on an underlying asset, rate, index, or event.
DerivativesUnderlying Asset
The asset, rate, index, or reference on which a derivative's value is based.
DerivativesNotional Amount
The reference amount used to calculate derivative payments, which may exceed the cash initially exchanged.
Derivatives StrategiesCovered Call
A strategy that owns the underlying asset and sells call options against it.