Put option

A put option gives its holder the right to sell common stock at a stated price for a stated period of time. A put option can be quite valuable if the market price of the stock in question is declining over time, since the holder of the option can still sell the stock at a higher price.

A put option is the reverse of a call option, where the holder has the right, but not the obligation, to buy shares.

Related Courses

Corporate Finance 
Treasurer's Guidebook