: Gives the buyer the right to sell a stock at a set strike price before a specific expiration date.
The choice to buy or sell depends on whether you are (expecting prices to rise), bearish (expecting prices to fall), or neutral . Strategy Name Market Outlook Risk / Reward Profile Buy Call Limited loss (premium paid); unlimited profit . Sell Call Short Call Bearish / Neutral buy call sell put
: Standard equity options typically control 100 shares of the underlying stock. The Four Basic Moves : Gives the buyer the right to sell
: This is the price paid by the buyer to the seller (writer) for the rights granted by the option. Sell Call Short Call Bearish / Neutral :
(premium paid); high profit if stock falls to zero. Sell Put Bullish / Neutral
: Gives the buyer the right to buy a stock at a set "strike price" before a specific expiration date.
(premium received); unlimited loss if stock rises. Buy Put