Call and Put Option Investments – What Are They?
When you acquire an option, you are getting the right to either buy or the right to sell shares of a certain security. You have the right but not the obligation to do so. When talking about a call option, the right is for purchasing the shares. Call options give you not just the right to buy a stock. They also give you the right to do so at a predetermined price and by a specific expiration date. The predetermined price is called a strike price. In the U. S., the shares can be purchased at any time before the expiration. Should the call buyer decide to purchase the shares, the seller must sell them at the strike price already agreed upon. When a call buyer makes this purchase, it is said that he or she is exercising the option. The right to sell shares of a security at a strike price which is predetermined is called a put option. Put options also come with an expiration date for exercising the option. If a put buyer decides to sell the shares, they have to be purchased at the strike pr
