Practical Law UK Glossary 3-107-7087 (Approx. 4 pages)
Glossary
Put option
A type of option which grants a right (but not an obligation) for a potential seller to sell an asset to a buyer either at a pre-agreed price or at a price to be determined in accordance with a pre-agreed formula. The option is generally exercisable by the seller during an agreed period. The term is normally used in relation to shares or other securities but can be used in relation to other assets. A put option provides a safety net for a potential seller by guaranteeing a price for a limited period.