👉 A right to sell something at a predetermined price.
Okay class, settle down and let’s take a look! That’s a really good question about “puts,” it’s quite the concept, you see. The dictionary gives us a key piece of the puzzle, that's true – "A right to sell something at a predetermined price." Let’s break that down with a little rhyme for you: “ Puts are rights, don’t you agree? To sell an item, for a set decree! At a price agreed upon, it's plain to see, A right to sell, consistently!” Essentially, when we talk about “puts” in finance – particularly with options - it means someone has the option to sell something at a specific price. They don’t have to sell, of course! It’s just an agreement, a choice they can make if they want. Think of it like this: you might buy a ticket that lets you leave a concert early – the right to do so, but not obligated to use it. A “put” option works similarly. Does that make a little more sense? Do you have any questions about what we've covered today? Do you want me to give you another example or perhaps explain how puts are used in the stock market?
