A put option is an agreement to sell an asset at an agreed price on or before a particular date.
The retailer took out the contract, which is essentially a bet on Debenhams shares going up, last year. The contract covers a 10.5% stake in the department store.
Under the terms of the deal, if shares rise between now and the end of the contract, Goldman Sachs will pay Sports Direct the difference on the stake. But if shares fall, Sports Direct would have to buy the stake or pay Goldman Sachs the difference.
Mike Ashley, the billionaire owner of Sports Direct, is fond of these kinds of bets. Sports Direct previously had a similar arrangement with Tesco, which has now expired. Sports Direct says in Thursday's update that the Debenhams bet is the only put option it has open at the moment.
The company "reiterates its intention to be a supportive stakeholder in Debenhams and to create value in the interests of both Sports Direct's and Debenhams' shareholders."
Sports Direct's total exposure under the bet is £85 million, according to the Guardian. Debenhams shares have barely budged since the retailer first took out the contract. Last January when Sports Direct did the deal Debenhams was trading at 73.35p. Today it is trading at 73.97p.