DEFINITION of 'Putable Common Stock'

Common stock that gives investors the option to put the stock back to the company at a predetermined price.

Also known as a "putable swap".

BREAKING DOWN 'Putable Common Stock'

With putable common stock, investors have the option of selling their shares back to the issuer at a predetermined price. Typically, this price is relatively low, so the option to put acts merely as a type of insurance for investors, sweetening the security.

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