put ¹

1. An option that conveys to its holder the right, but not the obligation, to sell a specific asset at a predetermined price until a certain date. In most cases, puts have 100 shares of stock as the underlying asset. For example, an investor may purchase a put option on GenCorp common stock that confers the right to sell 100 shares at $15 per share until September 21. Puts are sold for a fee by other investors, who incur an obligation to purchase the asset if the option holder decides to sell. Investors purchase puts in order to take advantage of or hedge the possibility of a decline in the price of the asset. Also called put option. Compare call 1¹. See also transferable put right.
2. Sale of an issue of bonds before maturity by forcing the issuer to buy at par. Few bond issues permit the holder this option.
3. In leasing, the required purchase of the leased asset by the lessee at the conclusion of a lease using an agreed-upon formula.