Which is the best definition of a put option?
A)The right to buy an asset at a fixed price during a particular time period.
B)The right to sell an asset at a fixed price during a particular time period.
C)A security that gives the holder the right to purchase shares of a stock at a fixed price over a period of time.
D)The act of buying or selling the underlying asset via the option contract.

Question

Quizplus · Accepted Answer

A put option is a contract that gives the holder the right, but not the obligation, to sell an underlying asset at a fixed price (strike price) during a particular time period. Essentially, it allows the holder to benefit from a decrease in the price of the underlying asset.

Which Is the Best Definition of a Put Option