Calls and Puts
Calls and Put Options are the two types of options that exist. If an investor wants to make an option investment he/she can buy or sell a Call option or he/she can buy or sell a Put option. If you buy a Call option you think that the price of the stock will go higher. If you sell a Call Option you think the price of the stock will go lower. If you buy a Put option you think that the price of the stock will go lower. If you sell a Put Option you think the price of the stock will go higher. As you can see calls and put options are used for different movements of the stock, but at the same time for a particular expected move you can use either a Call or a Put option. The only difference will be if you buy the call option or sell the call option, and if you buy the put option or sell the put option.
When using calls and put options, you have also the ability of creating many different strategies known as spreads. Each spread will use different calls and put options with different prices and different maturities for the same stock. Which spread of calls and put options to use will depend on what you are looking for as an investor. Some spreads on calls and put options are for generating monthly income, others are for pure speculation. Finally, calls and put options can be use to protect whatever investment you already have on a stock, in other words, you can use put and call options as an insurance in case the stock market goes down in value.
Please contact TeoFutures TODAY at 1-866-840-1613 or email us at jmalo@teofutures.com for more information on Calls and Puts.
