Confusion with Callable/Putable common shares

CFA Level I Equities
#1

Dear all,

Good day!

Does callable common shares bear any links to a call option with underlying asset- common shares? Likewise, do putable common shares means put option with common shares as underlying asset?

From Schwesers Notes, it seems to suggest that callable common shares is not a call option whereas putable common shares really mean a put option on common shares.

Can anyone shed some light on this?

Thank You.

Cheers,

Ernest

#2

Callable stock is analogous to a callable bond: a long position in the stock and a short position in a call option, owned by the issuer of the stock.

Putable stock is analogous to a putable bond: a long position in the stock an a long position in a put option, with the put written by the issuer of the stock.