What is the difference between a call option and a put option?
A call option gives the option buyer the right, but not the
obligation, to buy a certain amount of stock on or before a certain
date for a certain price. A put option gives its buyer the right,
but not the obligation, to sell stock on or before a certain date
for a certain price. How the options are exercised is another
difference. If you bought a put, you're hoping the stock price
falls below the strike price--the certain price in the contract. It
would make no sense to sell stock for $10 a share if it's $15 now,
right? Calls exercise when their stock price goes above the strike
price.