Glossary · Options
Call / Put
The right to buy / the right to sell.
A call option gives the holder the right to buy the underlying at the strike. Calls generally gain value when the underlying rises (all else equal). A put option gives the holder the right to sell at the strike and generally gains value when the underlying falls.
Buying calls or puts limits the buyer’s loss to the premium paid. Selling naked options can carry much larger risk. Directional bias, strike choice, and time until expiration all shape outcomes.
Example
Expecting a rally, you buy a $100 call. Expecting a decline or wanting downside protection, you buy a $100 put on the same stock.