How does a put option work get exercised


How does a put option work get exercised


This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (November 2015) ( Learn how and when to remove this template message)In finance, a put or put option is a stock market device which gives the owner of a put the right, but not the obligation, to sell an asset (the underlying), at a specified price (the strike), by a predetermined date (the expiry or maturity) to a given party (the seller of the put).

Options contracts are essentially the price probabilities of future events. The more likely something is to occur, the more expensive an option would be that profits from that event. A:A put option is a contract that gives the option holder the right, but not obligation, to sell a set amount of shares (100 shares per contract) at a set price. If the option is exercised, the option writer must purchase the shares from the option holder.The opposite of a put option is a call option, which gives the holder the right to purchase a set amount of shares at a set price.

Whether a put or a call option, however, the option holder can exercise or act on the contract at any time ( American option) until its expiration date.If the holder wants to exercise the contract, he or she simply lets the broker know of the intent to exercise. For example, if Max purchases one The owner of an option contract has the right to exercise it, and thus require that the financial transaction specified how does a put option work get exercised the contract is to be carried out immediately between the two parties, whereupon the option contract is terminated.

Options exchanges have a cut-off time of 4:30 p.m. CT, for receiving an exercise notice. Be aware that most brokerage firms have an earlier cut-off time for submitting exercise instructions in order to meet exchange deadlines. All standardizeHow a Put Option Trade WorksPut options are bets that the price of the underlying asset is going to fall.




How does a put option work get exercised

How does a put option work get exercised

How does a put option work get exercised



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