Differentiate between call option & put option.

Question

Stock Market Box · Accepted Answer

Call Option and Put Options Difference


	
		
			
			Option
			
			
			Call Option
			
		
		
			
			Don't force anyone to buy, but give rights.
			
			
			Don't sell, but give rights
			
		
		
			
			Investors set a strike limit when they expect the price will rise.
			
			
			Investors can place a strike limit on the stock to allow them to purchase it before its expiry date.
			
		
		
			
			If the stock's price is lower than the strike price for a specified duration, the underlying stock will lose its value.
			
			
			If the strike price is higher than the stock's value for a specified period, the underlying stock will lose its value.
			
		
		
			
			A put option can be purchased with In, Out or At of the money. The value is determined by the difference between the strike and underlying prices.
			
			
			A call option can be purchased with In, Out or At of the money. The value is determined by the difference between the strike and underlying prices.
			
		
		
			
			You will need to enter the premium amount as well as lot size information if you wish to purchase shares of TCS at a strike of Rs 1950 per month for May. If the stock price is lower than the strike price during the duration, then you will receive the shares and make profits. The premium amount will be forfeited if the option isn't exercised within the specified time.
			
			
			You must enter the premium amount as well as lot size information if you wish to sell TCS shares at Rs 2500 per share for May. If the stock price is greater than the strike price before expiry, the shares will be sold at profit. The premium amount will be forfeited if the option isn't exercised within the time limit.

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Differentiate between call option & put option.

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Option	Call Option
Don't force anyone to buy, but give rights.	Don't sell, but give rights
Investors set a strike limit when they expect the price will rise.	Investors can place a strike limit on the stock to allow them to purchase it before its expiry date.
If the stock's price is lower than the strike price for a specified duration, the underlying stock will lose its value.	If the strike price is higher than the stock's value for a specified period, the underlying stock will lose its value.
A put option can be purchased with In, Out or At of the money. The value is determined by the difference between the strike and underlying prices.	A call option can be purchased with In, Out or At of the money. The value is determined by the difference between the strike and underlying prices.
You will need to enter the premium amount as well as lot size information if you wish to purchase shares of TCS at a strike of Rs 1950 per month for May. If the stock price is lower than the strike price during the duration, then you will receive the shares and make profits. The premium amount will be forfeited if the option isn't exercised within the specified time.	You must enter the premium amount as well as lot size information if you wish to sell TCS shares at Rs 2500 per share for May. If the stock price is greater than the strike price before expiry, the shares will be sold at profit. The premium amount will be forfeited if the option isn't exercised within the time limit.