The owner of a regular exchange-listed put-option on a stock
A)has the right to buy 100 shares of the underlying stock at the exercise price.
B)has the right to sell 100 shares of the underlying stock at the exercise price.
C)has the obligation to buy 100 shares of the underlying stock at the exercise price.
D)has the obligation to sell 100 shares of the underlying stock at the exercise price.

Question

Quizplus · Accepted Answer

The owner of a regular exchange-listed put-option on a stock has the right to sell 100 shares of the underlying stock at the exercise price. This means that if the stock price falls below the exercise price, the option holder can exercise the option and sell the stock at the higher exercise price, thereby making a profit.

The Owner of a Regular Exchange-Listed Put-Option on a Stock