Options Basics: Calls and Puts Explained

Options give you the right, but not the obligation, to buy or sell a stock at a specific price. Learn the fundamentals of calls, puts, expiration, and strike prices.

Key Takeaways

• 1.A call option gives the right to BUY at the strike price
• 2.A put option gives the right to SELL at the strike price
• 3.Options have expiration dates — time decay erodes their value
• 4.ITM, ATM, and OTM describe the relationship between strike and market price