Put Option

This Issue in United States

Put Option

Concept of Put Option in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An option (i.e. the right to buy or sell a financial instrument at some agreed conditions) that gives the buyer the right, but not the obligation, to sell a specified quantity of the underlying asset at a fixed price, on or before a specified date. The seller (writer) of a put option has the obligation (because they have sold the right) to take delivery of the underlying asset (or the cash equivalent of any negative movement in the value of the underlying) if the option is exercised by the buyer.

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See Also

• Derivatives Contract