Put Option
Right to sell a given security at a stipulated price until a future expiration date. For example, assume the "None-Do-Well" company's stock has a market value of $20. Investor A sells Investor B an option (right) to buy Investor A's shares in the "None-Do-Well" company at a price of $25, good until 60 days hence. Investor B pays a premium of $4 per share for this right. If the stock's market value increases to a price greater than $29, Investor B will make a profit on the transaction. If, however, the stock falls below its original price of $20, Investor A will keep the stock as well as the $4 premium right per share it received from Investor B. If the 60-day limit expires without the right being executed, the option becomes void and worthless.
Popular Insurance Terms
Inquiry conducted by a committee of the legislature of the State of New York in 1905 that looked at abuses of life insurance companies operating in the state. This study led to stricter ...
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Cooperative organization among insurers that rates and prepares new policy forms according to guidelines and regulations of the state insurance department. Loss experience, collected ...
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Workers' premiums in a contributory employee benefit plan. ...
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