understanding financial jargon
The Put Option gives the owner the right (but not the obligation) to sell a share at some time in the future before the option expiry date, but at a price agreed now. It is commonly used as a type of insurance, where an investor might feel the price of a stock they hold may fall in the near future, but they want to hold for the long term. If the price does fall, the 'put' option will make money, offsetting losses on the main share holding. If the price rises then the investor loses money on the option but gains on the main holding
If an investor wants to buy the right to buy a share in the future they would buy a Call Option.
What to do if you need more help
If you need more help with your specific commercial loan, mortgage or insurance requirement please speak to a professional financial adviser.
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