Call vs put options
A call gives its holder the right, not the obligation, to buy; a put gives the right to sell. Exercise price, timing and conditions are set by the agreement.
Call vs put options in practice
Hypothetical: an agreement gives an investor a call on a founder’s shares after year five and gives the founder a put if specified performance conditions are missed. These are different triggers; the put is not assumed to begin in year five.
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| Right | Holder may | Assumed trigger |
|---|---|---|
| Call | Buy the specified shares at the agreed price | After year five, subject to terms |
| Put | Sell the specified shares at the agreed price | Specified performance conditions missed |
Terms Related to Call vs put options
Warrant · Term sheet · Rollover equity · Preferred equity · All of the glossary