Buying Calls And Puts at Buying

Buying Calls And Puts. Learn more & get started with opt. Buying a put gives you the right to sell the underlying instrument at the strike price on or before the expiration date.

The buyers of calls and puts pay premiums to the sellers. Simply because selling gets to be a little bit more involved, as you are only obligated to sell the stock under certain conditions. That way you keep the entire premium for yourself.

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If you’re used to buying 100 shares of stock per trade, buy one option contract (1 contract = 100 shares). If you’re comfortable buying 200 shares, buy two option contracts, and so on. Buying a put gives you the right to sell the underlying instrument at the strike price on or before the expiration date. A put option is bought if the trader expects the price of the underlying asset to fall within a certain time frame.