The buyer of a put option on shares:
A) obtains the right to sell the shares at an agreed future time at their market price at that time
B) must sell the shares at an agreed future time at a price determined now
C) obtains the right to sell the shares at an agreed future time at a price determined now
D) must sell the shares at an agreed future time at their market price at that time

Question

Quizplus · Accepted Answer

A put option gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price (strike price) within a specified time period. This means the buyer of a put option can decide to sell the shares at the agreed-upon price, regardless of the market price at that future time.

The Buyer of a Put Option on Shares