put option (put)
An option contract that conveys the right, but not the obligation, for the Option Holder to sell short a specified number of shares of a security or a futures contract at a specified price, within a specified period of time. option traders will buy a put option when they believe the price of a security is going to decline because it locks in the selling price for the underlying assets at the higher, current level, guaranteeing a profit if the price goes down prior to the expiration date. If the price goes up instead of down, the trader's loss is limited to the cost of the option contract. Often referred to simply as a "Put." Compare to call option. See Expiration Date.
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Covered combination
expiration month
covered put
put call parity
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