What does a put option give the holder the right to do?

A put option provides the holder with the right to sell a stock at a predetermined price, known as the strike price, within a specified time period. This financial instrument is typically used by investors who anticipate that the price of the underlying stock will decrease. By holding a put option, the investor can profit from the decline in stock price by selling the asset at the higher strike price instead of the lower market price. This function is particularly valuable for hedging against losses in a declining market or for speculative purposes.

The correct answer identifies that the essence of a put option lies in granting the holder the right to sell, which is a key concept in options trading within finance. The other options do not accurately reflect the purpose and functionality of a put option, which solely deals with the right to sell rather than buying, exchanging, or converting assets.