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Put option, the Glossary

In finance, a put or put option is a derivative instrument in financial markets that gives the holder (i.e. the purchaser of the put option) the right to sell an asset (the underlying), at a specified price (the ''strike''), by (or on) a specified date (the expiry or ''maturity'') to the writer (i.e.^[1]

37 relations: Asset, Call option, CBOE S&P 500 PutWrite Index, Covered option, Credit default option, Derivative (finance), Expiration date, Finance, Financial market, Forward contract, Greenspan put, Hedge (finance), Insurance, Interest rate cap and floor, Intrinsic value (finance), Margin (finance), Market sentiment, Mathematical finance, Maturity (finance), Moneyness, Naked option, Option (finance), Option time value, Options strategy, Pre-emption right, Protective option, Put–call parity, Real options valuation, Right of first refusal, Shareholder, Speculation, Spot contract, Stock, Strike price, Valuation of options, Volatility (finance), Yahoo! Finance.

Asset

In financial accounting, an asset is any resource owned or controlled by a business or an economic entity.

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Call option

In finance, a call option, often simply labeled a "call", is a contract between the buyer and the seller of the call option to exchange a security at a set price. Put option and call option are options (finance).

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CBOE S&P 500 PutWrite Index

The CBOE S&P 500 PutWrite Index (ticker symbol PUT) is a benchmark index that measures the performance of a hypothetical portfolio that sells S&P 500 Index (SPX) put options against collateralized cash reserves held in a money market account. Put option and CBOE S&P 500 PutWrite Index are options (finance).

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Covered option

A covered option is a financial transaction in which the holder of securities sells (or "writes") a type of financial options contract known as a "call" or a "put" against stock that they own or are shorting. Put option and covered option are options (finance).

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Credit default option

In finance, a default option, credit default swaption or credit default option is an option to buy protection (payer option) or sell protection (receiver option) as a credit default swap on a specific reference credit with a specific maturity. Put option and credit default option are options (finance).

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Derivative (finance)

In finance, a derivative is a contract that derives its value from the performance of an underlying entity.

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Expiration date

An expiration date or expiry date is a previously determined date after which something should no longer be used, either by operation of law or by exceeding the anticipated shelf life for perishable goods.

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Finance

Finance refers to monetary resources and to the study and discipline of money, currency and capital assets.

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Financial market

A financial market is a market in which people trade financial securities and derivatives at low transaction costs.

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Forward contract

In finance, a forward contract, or simply a forward, is a non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed on in the contract, making it a type of derivative instrument.

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Greenspan put

The Greenspan put was a monetary policy response to financial crises that Alan Greenspan, former chair of the Federal Reserve, exercised beginning with the crash of 1987. Put option and Greenspan put are options (finance).

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Hedge (finance)

A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment.

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Insurance

Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury.

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Interest rate cap and floor

In finance, an interest rate cap is a type of interest rate derivative in which the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price.

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Intrinsic value (finance)

In finance, the intrinsic value of an asset or security is its ''value'' as calculated with regard to an inherent, objective measure.

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Margin (finance)

In finance, margin is the collateral that a holder of a financial instrument has to deposit with a counterparty (most often their broker or an exchange) to cover some or all of the credit risk the holder poses for the counterparty.

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Market sentiment

Market sentiment, also known as investor attention, is the general prevailing attitude of investors as to anticipated price development in a market.

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Mathematical finance

Mathematical finance, also known as quantitative finance and financial mathematics, is a field of applied mathematics, concerned with mathematical modeling in the financial field.

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Maturity (finance)

In finance, maturity or maturity date is the date on which the final payment is due on a loan or other financial instrument, such as a bond or term deposit, at which point the principal (and all remaining interest) is due to be paid.

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Moneyness

In finance, moneyness is the relative position of the current price (or future price) of an underlying asset (e.g., a stock) with respect to the strike price of a derivative, most commonly a call option or a put option. Put option and moneyness are options (finance).

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Naked option

A naked option or uncovered option is an options strategy where the options contract writer (i.e., the seller) does not hold the underlying asset to cover the contract in case of assignment (like in a covered option). Put option and naked option are options (finance).

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Option (finance)

In finance, an option is a contract which conveys to its owner, the holder, the right, but not the obligation, to buy or sell a specific quantity of an underlying asset or instrument at a specified strike price on or before a specified date, depending on the style of the option. Put option and option (finance) are options (finance).

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Option time value

In finance, the time value (TV) (extrinsic or instrumental value) of an option is the premium a rational investor would pay over its current exercise value (intrinsic value), based on the probability it will increase in value before expiry. Put option and option time value are options (finance).

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Options strategy

Option strategies are the simultaneous, and often mixed, buying or selling of one or more options that differ in one or more of the options' variables. Put option and options strategy are options (finance).

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Pre-emption right

A pre-emption right, right of pre-emption, or first option to buy is a contractual right to acquire certain property newly coming into existence before it can be offered to any other person or entity.

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Protective option

A protective option or married option is a financial transaction in which the holder of securities buys a type of financial options contract known as a "call" or a "put" against stock that they own or are shorting. Put option and protective option are options (finance).

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Put–call parity

In financial mathematics, the put–call parity defines a relationship between the price of a European call option and European put option, both with the identical strike price and expiry, namely that a portfolio of a long call option and a short put option is equivalent to (and hence has the same value as) a single forward contract at this strike price and expiry. Put option and put–call parity are options (finance).

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Real options valuation

Real options valuation, also often termed real options analysis,Adam Borison (Stanford University). Put option and real options valuation are options (finance).

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Right of first refusal

Right of first refusal (ROFR or RFR) is a contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transaction with a third party.

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A shareholder (in the United States often referred to as stockholder) of corporate stock refers to an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal owner of shares of the share capital of a public or private corporation.

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Speculation

In finance, speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more valuable shortly.

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Spot contract

In finance, a spot contract, spot transaction, or simply spot, is a contract of buying or selling a commodity, security or currency for immediate settlement (payment and delivery) on the spot date, which is normally two business days after the trade date.

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Stock

Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the shares by which ownership of a corporation or company is divided.

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Strike price

In finance, the strike price (or exercise price) of an option is a fixed price at which the owner of the option can buy (in the case of a call), or sell (in the case of a put), the underlying security or commodity. Put option and strike price are options (finance).

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References

[1] https://en.wikipedia.org/wiki/Put_option

Also known as American Put Option, European put, European put option, Long put, Put options, Short put.

Put option, the Glossary

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References