A put option is a right to
A) force another party to buy the underlying security.
B) repurchase a previously sold underlying security.
C) sell the underlying security.
D) buy the underlying security.

Question

Quizplus · Accepted Answer

A put option provides the holder the right to sell the underlying security at a predetermined price, known as the strike price, within a specific time period. This is useful if the holder believes that the price of the underlying security will decrease, allowing them to sell the security at a higher price than the market value. Options do not provide the right to force another party to buy or sell the security.

A Put Option Is a Right to