Calls and puts

Options in plain words

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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.

Watch this lesson with Tessa. The full video, worked example, calculator, quiz and Ask Tessa are part of Money Globe X Silver, Gold and Platinum. Create your account to start learning.

Next lesson: Strike, expiry and premium

Educational information only - not financial advice.

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