Put Options
A put option gives the holder the right to:
Put = right to SELL (bearish). Remember: "Put it to someone" = sell to them.
Complete Analysis & Legal Rationale
A put option gives the holder the RIGHT to SELL the underlying asset at the strike price. Put buyers are bearish - they profit when the price falls below the strike price.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
The right to BUY is a CALL option, not a put.
Matches the verified teaching point in the explanation.
Options don't provide interest payments - bonds do.
Convertible bonds/preferred have conversion features, not options.
Official Standard: Governs options accounts, approvals, and related supervisory requirements (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.