Definition
1. (Finance/Securities) A put, or put option, is a contract giving the holder the right — but not the obligation — to sell an asset (typically shares of stock or a commodity) at a specified price (the strike price) on or before a specified date. The seller of the put option is obligated to buy the asset if the holder exercises the right. The holder pays a premium for this privilege. A put option is the mirror of a call option, which confers the right to buy.
2. (Pleading — historical) In common law pleading, "to put" meant to submit or commit a matter to a particular tribunal or mode of determination. Most commonly encountered in the formula "the defendant puts himself upon the country," meaning the defendant elects trial by jury and trusts the resolution of the factual dispute to a jury rather than to a legal issue decided by the court.
Common Language
Modern common usage (Wiktionary): As a verb, to place or set something in a position. As a noun in financial contexts, Wiktionary treats "put" as an ellipsis of put option, reflecting the term's absorption into general commercial vocabulary.
Historical common usage (Webster's 1913): Recorded only as an archaic noun meaning a pit, cited from Chaucer. The financial and pleading senses do not appear in the 1913 general dictionary, marking them as terms of art that had not yet entered ordinary lay vocabulary.
The gap here is directional: the modern common language has absorbed the financial sense of put closely enough that a lay reader may think they understand it, but the precision of the contract right — the asymmetry between holder and seller, the role of the premium, and the distinction from an obligation to sell — is routinely lost in casual usage. The pleading sense has no surviving common counterpart.
Common Confusion
Put vs. Call: A put gives the right to sell; a call gives the right to buy. These are frequently transposed by non-specialists. A holder of a put profits when the underlying asset falls in value; a holder of a call profits when it rises.
Put option vs. short sale: Both strategies profit from a decline in an asset's price, but they are structurally different. A short sale involves borrowing and selling shares now with an obligation to repurchase them later. A put option involves no such borrowing or immediate sale obligation; the holder simply has the right to sell at the strike price.
Pleading "put" vs. "pray": In historical pleading, to "put" oneself upon the country was distinct from "praying" for judgment. The former elected the mode of trial; the latter requested the court's ruling on a legal question. These procedural phrases appear interchangeably in older reports but carry distinct technical meaning.
Core Elements
For a put option (financial instrument):
1. Underlying asset — the specific security, commodity, or other asset to which the option applies.
2. Strike price — the fixed price at which the holder may sell the underlying asset.
3. Expiration date — the date on or before which the right must be exercised.
4. Premium — the price paid by the holder to the seller (writer) for the option.
5. Right without obligation — the holder may exercise or allow the option to expire; the writer has no equivalent election once the holder exercises.
Recognized Forms
/SUBTYPES
American put: May be exercised at any time on or before the expiration date.
European put: May be exercised only on the expiration date itself, not before.
Protective put: A put purchased alongside a long position in the underlying asset, functioning as a hedge against price decline.
Cash-secured put: A put written by a seller who holds sufficient cash to purchase the underlying asset if the option is exercised, used as an income strategy.
Why It Matters in Research
The term operates in two entirely separate legal contexts — historical common law pleading and modern securities/derivatives law — and a researcher must immediately determine which context governs the source being read.
In older case reporters and pleading treatises (pre-twentieth century), "put" almost exclusively signals the pleading formula. The phrase "puts himself upon the country" is a stock formula appearing in thousands of reported cases; understanding it is essential for reading older trial records and indictments accurately. It is not a financial reference.
In twentieth- and twenty-first-century securities law, regulatory materials, and commercial litigation, "put" invariably refers to the option contract. Securities Exchange Act materials, derivatives regulations under the Commodity Exchange Act, and ISDA documentation all use the term in the financial sense. Researchers working in options litigation, hedge fund disputes, or structured finance should expect the financial definition to dominate entirely.
A particular trap: some historical equity cases discuss "puts" in the financial sense as early as the nineteenth century, when they were sometimes treated as wagering contracts and challenged as void. These cases sit at the intersection of both bodies of law and require careful reading. Anderson's Dictionary, notably, captures this dual usage — recording both the pleading verb and the financial noun — making it one of the few historical sources to bridge both meanings.
The Burrill's entry in the source material is clearly a transcription artifact from an adjacent entry and provides no usable content on this term.
Historical Dictionary Support
Black's Law Dictionary (both the first and second editions) treats "put" exclusively as a pleading term, defining it through the "puts himself upon the country" formula. This reflects the dominant legal usage at the time of those editions and tells researchers that the financial sense was not yet a primary law dictionary concern.
Anderson's Dictionary of Law is the most complete of the historical sources, capturing both senses: the pleading verb (sense 1) and the financial noun (sense 2), which Anderson defines as "the privilege, for a nominal consideration, of delivering personalty within a certain time at a specified price." This is a recognizable early formulation of the put option, though "delivering" is technically the seller's act upon exercise, reflecting a perspective from the option writer's side rather than the holder's.
Bouvier's Law Dictionary aligns with Black's, focusing on the pleading sense and citing Gould's Pleading for the technical proposition that electing jury trial ("putting upon the country") is distinct from relying on an issue in law.
None of the historical dictionaries address the modern securities regulatory framework, derivatives contracts, or the American/European put distinction. Researchers relying solely on these sources for the financial definition will find early formulations useful for historical context but inadequate for modern practice.
Jurisdictional Note
The financial put option is governed in the United States primarily by federal securities and commodities law, including SEC and CFTC regulation, with significant overlay from exchange rules and ISDA master agreements in OTC derivatives. State law governs enforcement of specific options contracts in many commercial contexts. The pleading sense is historically uniform across common law jurisdictions but is obsolete in modern civil procedure.