Put Option (Noun)
Meaning 1
An option to sell.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The investor purchased a put option to sell 100 shares of the company's stock at $50 per share if the price dropped below that level.
- Buying a put option allows the investor to lock in a particular selling price for their stocks.
- The put option to sell stocks at the predetermined price was exercised when the market price dropped below the specified price.
- Trading a put option typically gives the buyer the right to sell a specific number of shares at an agreed-upon price.
- The put option strategy is often used by investors to mitigate potential losses in the event of a downturn in the market.
Meaning 2
The option to sell a given stock (or stock index or commodity future) at a given price before a given date.
Classification
Nouns denoting acts or actions.
Examples
- The investor purchased a put option to sell 100 shares of the company's stock at $50 per share before the expiration date in case the market price dropped.
- A put option gives the holder the right, but not the obligation, to sell a specified asset at a predetermined price on or before the expiration date.
- The trader bought a put option on a commodity future to hedge against potential losses if the price of the commodity fell below a certain level.
- The put option allowed the investor to sell the stock at the strike price of $75 per share, even if the market price had fallen to $60 per share.
- The value of a put option typically increases as the price of the underlying asset decreases, making it a popular choice for investors looking to hedge against potential losses.