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Put option
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A put option gives the buyer the right, but not the obligation,
to sell an underlying security at a specific price for a specified
time. The seller of a put option has the obligation to buy the
underlying security should the buyer choose to exercise his option
to sell.
The buyer of a put option has purchased the right to sell 100
shares of the underlying stock at the contracted exercise price.
Thus, the buyer of one QQQ April 25 put has the right to sell 100
shares of QQQ at $25 any time prior to the expiration date. In
order to exercise the option and sell the underlying at the agreed
upon exercise price, the buyer must file a proper exercise notice
with the OCC through a broker before the date of expiration. All
puts covering QQQ stock are referred to as an "option
class." Each individual option with a distinctive trading
month and strike price is an "option series." |
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