Call and put options are derivative investments, meaning their price movements are based on the price movements of another financial product, which is often called the underlying.
Call
A call option is bought if the trader expects the price of the underlying to rise within a certain time frame.
A call is an option contract giving the owner the right, but not the obligation, to buy a specified amount of an underlying security at a specified price within a specified time.
Put
A put option is bought if the trader expects the price of the underlying to fall within a certain time frame.
Put options give owners the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified timeframe.
Balance: Call and Put options