An option (here a put option) that gives a issue the right, but not the obligation, to put a bond (puttable bond), i.e., to redeem the bond and repay its principal before maturity date. The protective guarantee (set out in a provision) allows the issuer to buy back the bond under specific market conditions (e.g., the price of an underlying stock to which the bond is convertible) reaches a particular level.

This option is an embedded put option that provides conditional protection, especially when market prices decrease beyond the level deemed to be still favorable to the issuer.

On the other hand, a bondholder may have a conditional call option, i.e., the right to convert a callable bond to a non-callable bond in the event that the bond is called by the issuer.