Options Trading

Call option (bet on price going up)

A call gives you the right to buy something later at a fixed price.

• You buy a call if you think the price will increase

• If it goes up → you win (you can buy cheap, sell high)

• If it stays flat or drops → you just lose what you paid for the option

Plain example:
You buy a call for a stock at $100.

• If the stock goes to $120 → you can still buy at $100 → profit

• If it stays at $90 → you wouldn’t use it → you lose the option cost

👉 Simple way to remember:
Call = “call it up” → betting on upside

Put option (bet on price going down)

A put gives you the right to sell something later at a fixed price.

• You buy a put if you think the price will decrease

• If it goes down → you win (you can sell high, buy back lower)

• If it goes up → you just lose what you paid

Plain example:
You buy a put at $100.

• If the stock drops to $70 → you can still sell at $100 → profit

• If it rises to $120 → you ignore it → lose the option cost

👉 Simple way to remember:
Put = “put it down” → betting on downsideValue