You expect the stock price to rise . It grants the right to buy 100 shares at the strike price.

You expect the price to stay flat or rise . You are obligated to buy the shares if the buyer exercises their right. Buy vs. Sell Dynamics What are call and put options? - Vanguard

Buying and selling stock options is a versatile way to trade market movements with and defined risk . Unlike owning a stock outright, an option is a contract that gives you the right , but not the obligation , to buy or sell a stock at a specific price ( strike price ) by a certain date ( expiration ). The Core Contract Types

You expect the stock price to fall . It grants the right to sell 100 shares at the strike price, acting like insurance.

You expect the price to stay flat or fall . You are obligated to sell your shares if the buyer exercises their right. Put Options

There are two primary types of options, which function differently depending on whether you are the buyer or the seller: