You expect a stock to rise. Which option should you buy?

Expecting price increase → Buy Call. Calls gain value as stock rises. Maximum loss is limited to the premium paid if the stock falls.

You hold 100 shares and fear a near-term drop. How to hedge with options?

Buy a Protective Put: If stock falls, the Put profits offset your stock losses. If stock rises, the Put expires worthless but your stock gains.

What right does a Call option give?

The RIGHT (not obligation) to BUY 100 shares at the strike price before expiration.

Most common use of Put options?

Hedging downside risk on existing stock positions — Put profits when stock falls, offsetting losses on the shares.

Maximum loss for an option buyer?

The premium paid — that's the maximum an option buyer can lose (the contract expires worthless).

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IntermediateOptions Basics

Options 101: Call vs Put

Call options give the right to BUY shares; Put options give the right to SELL shares. Understanding both is the foundation of all options strategies.

TL;DR

Call options give the right to BUY shares; Put options give the right to SELL shares. Understanding both is the foundation of all options strategies.

Call Option: Bullish Bet

A Call option gives you the RIGHT (not obligation) to BUY 100 shares at a specific strike price before expiration. If the stock rises above the strike, you can buy at the lower strike and sell at market price for profit. The price paid is the "premium."

Key Terms:

Call optionstrike pricepremium

→Options Greeks Explained

Options 101: Call vs Put

Call Option: Bullish Bet

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