Definition of Put option

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TeachMeFinance.com - explain Put option



Put option

The term 'Put option ' as it applies to the area of agriculture can be defined as ' An option contract to sell a futures contract at an agreed price and time at any time until the expiration of the option. A put option is purchased to protect against a fall in price. The buyer pays a premium to the seller of this option. The buyer has the right to sell the futures contract or enter into a short position in the futures market if the option is exercised. See call option'.

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Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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