Put vs Call

There are 2 fundamental options which are the call option and the put option.

All options are sold in the form of a 100 share contract

You are buying or selling 100 shares of say a ABC stock

All options trading strategies, involve contract length and hedging with the 4 types of option contract options.

You can either buy or sell (write) options

put vs call

If you buy options you have to pony up a small fee per contract which gives you the

option to either Purchase their shares “call option” on or before the contract end date, or Sell shares you own “put option” to the other party in the contract.

You can see, the option is yours because you paid a fee for that right.

Of course, for every contract purchased, someone has to be selling it

But you too can be a seller. Bear in mind, you have no control of what happens once you sell a contract. You are obligated to do whatever the purchaser decides. The option is theirs.

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