Basically, a teamis limited to the number of times a player may be moved between the majors and minors (I'm not sure, but I think it's five times). Once they are "out of options" the player has the right to refuse the move and become a free agent.
The rule was put into place to prevent team from abusing the promotion process (example: a team had two excellent minor leaguers that they needed for the "stretch run" but only one roster spot. Without the rule, that team could continue to promote one and demote the other as needed).

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