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An option—a right that operates as a continuing proposal—given in exchange for consideration—something of value—permitting its holder to sell a particular stock or commodity at a fixed price for a stated quantity and within a limited time period.

A put is purchased for a fee paid to the person who agrees to accept the stock or goods if they are offered. The purchaser of this right to sell expects the price of the stock or commodity to decrease so that he can deliver the stock or commodity at a profit. If the price rises, the option need not be exercised. The reverse transaction is a call.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

TO PUT, pleading. To select, to demand; as, the said C D puts himself upon the country; that is, he selects the trial by jury, as the mode of settling the matter in dispute, and does not rely upon an issue in law. Gould, Pl. c. 6. part 1, Sec. 19.

A Law Dictionary, Adapted to the Constitution and Laws of the United States. By John Bouvier. Published 1856.
References in periodicals archive ?
The difference between the strike price and the index value of this type of put option is similar to the deductible in a conventional insurance policy.
KDB Vice Chairman Jun Young-sam said it had to postpone the announcement because of the put option. "As we have to take into account buyer risks, we need a guarantee for the put option issued by a third party," he said.
Rating Reflects Banks' Commitment: Fitch takes the view that investors will exercise the put option at the end of the fifth year if DI does not redeem the securities.
Exercise of the put option and completion of the proposed disposal is expected to result in a loss on disposal of approximately USD 32m which the directors expect will be recognised in the financial year ended 31 December 2016.
Of the insurer's investors, a consortium led by Hong Kong-based Affinity Equity Partners (AEP) submitted an application for arbitration against Shin with the International Chamber of Commerce (ICC) last year to exercise the put option, since the insurer has yet to go public after years of delay.
Upon depreciation of the purchased euro put options and appreciation of the offsetting written krone put options, the Wrights assigned the holdings in these two positions to a charity.
If the VIX rises during a trading session, even if it remains below average, it signals an increase in put option activity.
This is how the trades were executed: In the first leg, through synchronized trades, an investor will sell some put options contracts to another at a price which is totally out of sync with the market.
Many oil traders are positioning themselves to profit from a further fall in prices, taking large short-positions in US crude contracts while going long in put options for oil at lower than current prices.
The bonds were issued on March 26, 2012 with a 10-year maturity, subject to a put option in three years.
Under the terms of the put option, if Debenhams shares fall below an agreed strike price, Sports Direct have the option to acquiring ordinary shares in Debenhams at the exercise price or pay the cash settlement value of the put option.
The agreement, known as 'put option',' gives firms the ability to sell shares in a company over a specific period and at a specific price and experts believe it could be a smart financial move by Ashley's firm.