Definition: An option that gives the holder the right to sell a stock at an agreed-upon price at any time up to an agreed-upon date. The holder usually will buy the stock that day, and is betting that the stock will decline in value. The difference between the stock price that day and the agreed-upon put value is the holder's profit.
Also Known As: Put
Examples: Hedge funds use put options to sell stock they think will decline in value.
