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Poison put

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Definition of Poison put

Poison Put Image 1

Poison put

A covenant allowing the bondholder to demand repayment in the event of a hostile merger.



Related Terms:

computer-aided design (CAD)

a system using computer graphics for product designs


computer-aided manufacturing (CAM)

the use of computers to control production processes through numerically
controlled (NC) machines, robots, and automated assembly systems


computer integrated manufacturing (CIM)

the integration of two or more flexible manufacturing systems through the use of a host computer and an information networking system


Covered Put

A put option position in which the option writer also is short the corresponding stock or has
deposited, in a cash account, cash or cash equivalents equal to the exercise of the option. This limits the
option writer's risk because money or stock is already set aside. In the event that the holder of the put option
decides to exercise the option, the writer's risk is more limited than it would be on an uncovered or naked put
option.


Full-Employment Output

The level of output produced by the economy when operating at the natural rate of unemployment.



Imputation tax system

Arrangement by which investors who receive a dividend also receive a tax credit for
corporate taxes that the firm has paid.


Impute

To assign a value to a good or service in place of a market value that is not available.


Poison Put Image 2

Imputed Rent

The value of consumption services obtained by owning one's house rather than having to pay rent.


input-output coefficient

a number (prefaced as a multiplier
to an unknown variable) that indicates the rate at which each
decision variable uses up (or depletes) the scarce resource


Input-output tables

Tables that indicate how much each industry requires of the production of each other
industry in order to produce each dollar of its own output.


National Output

GDP.


Output Gap

The difference between full employment output and current output.


Poison pill

Anit-takeover device that gives a prospective acquiree's shareholders the right to buy shares of the
firm or shares of anyone who acquires the firm at a deep discount to their fair market value. Named after the
cyanide pill that secret agents are instructed to swallow if capture is imminent.


poison pill

Measure taken by a target firm to avoid acquisition;
for example, the right for existing shareholders to buy additional
shares at an attractive price if a bidder acquires a large holding.


Potential Output or Potential GDP

Output produced when the economy is operating at its natural rate of unemployment.


Protective put buying strategy

A strategy that involves buying a put option on the underlying security that is
held in a portfolio. Related: Hedge option strategies


Put

An option granting the right to sell the underlying futures contract. Opposite of a call.


Put

An option to sell a stipulated amount of stock or securities within a
specified time and at a fixed exercise price. See Call.



Put an option

To exercise a put option.


Put bond

A bond that the holder may choose either to exchange for par value at some date or to extend for a
given number of years.


Put-call parity relationship

The relationship between the price of a put and the price of a call on the same
underlying security with the same expiration date, which prevents arbitrage opportunities. Holding the stock
and buying a put will deliver the exact payoff as buying one call and investing the present value (PV) of the
exercise price. The call value equals C=S+P-PV(k).


Put option

This security gives investors the right to sell (or put) fixed number of shares at a fixed price within
a given time frame. An investor, for example, might wish to have the right to sell shares of a stock at a certain
price by a certain time in order to protect, or hedge, an existing investment.


Put Option

A contract that gives the holder the right to sell an asset for a
specified price on or before a given expiration (maturity) date


put option

Right to sell an asset at a specified exercise price on or before the exercise date.


Put Option

Contract that grants the right to sell at a specified price at some time in the future.


Put price

The price at which the asset will be sold if a put option is exercised. Also called the strike or
exercise price of a put option.


Put provision

Gives the holder of a floating-rate bond the right to redeem his note at par on the coupon
payment date.


Put swaption

A financial tool in which the buyer has the right, or option, to enter into a swap as a floatingrate
payer. The writer of the swaption therefore becomes the floating-rate receiver/fixed-rate payer.



Putaway

The process of moving received items to storage and recording the related
transaction.


Puttable bond

A bond that allows the holder to redeem the bond at a
predetermined price at specified future dates. The bond contains an embedded
put option; i.e., the holder has bought a put option. See Callable bond.


throughput

the total completed and sold output of a plant during a period


Throughput agreement

An agreement to put a specified amount of product per period through a particular
facility. For example, an agreement to ship a specified amount of crude oil per period through a particular
pipeline.


Throughput contribution

Sales revenue less the cost of materials.


Transferable put right

An option issued by the firm to its shareholders to sell the firm one share of its
common stock at a fixed price (the strike price) within a stated period (the time to maturity). The put right is
"transferable" because it can be traded in the capital markets.


Uncovered put

A short put option position in which the writer does not have a corresponding short stock
position or has not deposited, in a cash account, cash or cash equivalents equal to the exercise value of the
put. Also called "naked" puts, the writer has pledged to buy the stock at a certain price if the buyer of the
options chooses to exercise it. The nature of uncovered options means the writer's risk is unlimited.



 

 

 

 

 

 

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