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

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

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

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