The put option allows:
A) the holder to sell shares if desired and requires the put seller to buy the shares at a fixed price.
B) the put seller to sell shares and requires the holder to buy shares at a fixed price.
C) the holder to buy shares if desired and requires the put seller to sell the shares at a fixed price.
D) the put seller to sell shares and allows the holder to sell shares at a fixed price.

Question

Quizplus · Accepted Answer

A put option gives the holder the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time frame. It obligates the seller of the put option to buy the underlying security at the strike price if the option is exercised by the holder.

The Put Option Allows