What Is Put Option And Call Option In Stock Market?
What is put option and call option in stock market
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Put options give you the right to sell something at a specific price for a fixed amount of time. The trader can buy puts when he (she) believe that stock or index will fall in price. The one who bought a put has the right, but not the obligation, to sell the underlying stock at the strike price of the option until the expiration date.
By selling a call option, you are selling the right to buy the underlying stock or index at a particular strike price to an option holder. Sellers have obligations. Selling a call option prompts the deposit of a credit. You get to keep this credit if the option expires worthless. A trader who sell call options believe that the market will fall.
By selling a call option, you are selling the right to buy the underlying stock or index at a particular strike price to an option holder. Sellers have obligations. Selling a call option prompts the deposit of a credit. You get to keep this credit if the option expires worthless. A trader who sell call options believe that the market will fall.
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In put option, owner has the right not an obligation to sell the shares at fixed price on or before the fixed date. In call option, the owner has the right not an obligation to buy the shares at fixed price.
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answered 8 months ago
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