Put To Seller
For example, consider a situation where an investor buys puts to hedge downside risk in his or her position in stock A. The investor buys three-month puts on A with a strike price of $25 and pays a premium of $1.50 (for example). The put seller or writer who earns the premium of $1.50 assumes the risk of buying A from the investor if it falls below $25. Towards the end of the three-month period, if stock A is trading at $22, the investor will sell stock A to the put writer, and receive $25 for each share of stock A.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
put to seller — exercise a put option; require that the option writer to purchase the stock at the strike price. Bloomberg Financial Dictionary … Financial and business terms
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Put option — NOTOC A put option (sometimes simply called a put ) is a financial contract between two parties, the seller (writer) and the buyer of the option. The put allows its buyer the right but not the obligation to sell a commodity or financial… … Wikipedia
put — An option contract giving the buyer the right to sell something at a specified price within a certain period of time. A put is purchased in expectation of lower prices. If prices are expected to rise, a put may be sold. The seller receives the… … Financial and business terms
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Put — An option granting the right to sell the underlying futures contract. Opposite of a call. The New York Times Financial Glossary * * * ▪ I. put put 1 [pʊt] verb put PTandPP putting PRESPART … Financial and business terms
Seller's Option — The right of a forward contract seller to choose some of the specifications of a commodity to be delivered. The choices about the delivered commodity s quality and delivery specifications must fit among the limits imposed by the terms of the… … Investment dictionary
put options — Contracts between a buyer and a seller giving the buyer ( holder) the right, but not the obligation, to sell the assets specified at a fixed price or formula, on or before a specified date. The seller of the put option assumes the obligation of… … Financial and business terms