What is Call and Put in Options Trading?
Call and put options are two types of options contracts in options trading. Here's an explanation of each: Call Option: A call option is a contract that gives the buyer the right, but not the obligation, to buy an underlying asset at a specified price (called the "strike price") on or before a specific date (called the "expiration date"). A call option is typically used when an investor expects the price of the underlying asset to go up. For example, if an investor believes that the stock of a company will increase in value, they may buy a call option to purchase the stock at a specific price, allowing them to profit if the stock price goes up. Put Option: A put option is a contract that gives the buyer the right, but not the obligation, to sell an underlying asset at a specified price (called the "strike price") on or before a specific date (called the "expiration date"). A put option is typically used when an investor expects the price of t...