Which of the following best describes a put option?

A put option is a financial contract that grants the holder the right to sell a specific asset at a predetermined price, known as the strike price, within a specified time frame. This characteristic is essential for understanding the mechanics of put options, as they provide investors with a way to hedge against potential declines in the value of the underlying asset. By having the right to sell, the holder can protect themselves from losses if the market price falls below the strike price.

In contrast, the other options do not accurately describe put options. The first option describes a call option, which is the financial instrument that grants the holder the right to buy an asset. The third option—that a put option has no expiration date—is incorrect since all options, including puts, have a defined expiration date by which they must be exercised or they become worthless. The fourth option inaccurately describes the nature of put options, as they are financial derivatives used primarily for hedging or speculative purposes rather than being specifically linked to venture capital investments. Understanding these distinctions helps clarify the role of put options in portfolio management and risk mitigation strategies.