A phrase that describes the act of exercising a put option. If a particular put contract is “put to seller”, the writer, being obliged to heed the holder’s instructions, would have to buy the underlying shares at the agreed-upon price (exercise price) from the put holder even though the current market price is lower than the exercise price. For instance, if an XYZ April 50 put were put to seller, the seller would have to buy 100 shares of XYZ at $50 per share from the put holder regardless of how far the underlying spot price is below $50.
December 21, 2024
