What is a Put Option?

In investing, a Put Option is a stock market device the gives the owner of the Put the right, but not the obligation, to sell an asset (known as the underlying), at a particular price (called the Strike), at a predetermined date (the maturity or expiry). Buying a Put means that the purchaser is pessimistic about the stock and believes that its price will decrease. The only way to make money on a put as a buyer is for the price of the stock to decrease below the strike price.


Provided by: Mometrix Test Preparation

Last updated: 02/26/2018


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