Option

An option that gives the buyer or holder the right but not the obligation to sell shares (or other financial instruments) at a fixed price on or before a given date. The seller or writer has the obligation to buy. Every put option has an exercise price, the price at which the holder is entitled to sell the shares to the option writer. If the price of the share falls below the exercise price, the option is said to be in the money and to have an intrinsic value that is equal to the difference between the two.