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Options Basics · Lesson 1

Calls and puts

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Calls and puts

In this lesson

Understand what a call and a put are, using everyday examples, and who buys and sells them.

Key takeaways

  • A call is the right (not the obligation) to buy at the strike price before or at expiry.
  • A put is the right to sell at the strike price — often used as insurance.
  • The buyer pays a premium; the most an option buyer can lose is that premium.
  • Option sellers collect the premium but take on obligations that can be risky.
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Next lesson: Strike, expiry and premium

Educational information only - not financial advice.

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