Put-Call Option
Private Equity glossary · Private Equity Fundamentals
Definition
Contractual arrangement allowing a minority to force or offer a sale of its stake.
Put-Call Option in plain English
Imagine you and a big investor own a business together, but you only own a small slice. A put-call option is a pre-agreed exit deal so nobody gets trapped: a "put" lets YOU force the big owner to buy your slice at a set price, and a "call" lets THEM force you to sell yours. It's like two friends splitting a car and agreeing upfront, "If either of us wants out, here's exactly how one buys the other's share" — so a small owner isn't stuck holding a stake forever with no way to cash out, and the majority isn't stuck with a partner they can't remove.
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