What is the difference between Call and Put Options?

Answer 1

Call Options: give the holder the right (but not the obligation) to BUY an asset at a predetermined price (the strike price) before the expiration date. Investors typically buy calls when they expect the price of the asset to INCREASE.

Put Options: give the holder the right (but not the obligation) to SELL an asset at a predetermined price before the expiration date. Investors buy puts when they expect the price of the asset to DECREASE.

Think of calls as a bet that the price will go UP, while puts are a bet that the price will go DOWN.

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