In equilibrium, the strategy has the same payoffs as writing a put option.

The put option is exercisable on one or more specified dates.

From the fund's point of view, it has sold discounted bonds for more than market value by including the put option.

The money you get from that option can be used to buy the put option.

Kirch said the conditions requiring it to accept an early use of the put option had not been met.

The issue features a put option, which allows noteholders to sell the notes back to the company in 2001.

One dealer, who is not involved in the transaction, said that the put option was the sort of protection investors needed.

Similarly, a put option is the right to sell a stock, also for a certain price for a limited time.

For the choice of a put option, the payout is .

Nor, at that time, was there a mechanism by which the existence of the put option could generally be disclosed.