Explain Put & Call

1313 views 3 replies

Can any one explain what is  put & call

Replies (3)
Put & Call are right to a option buyer & seller & not an obligation. In put option ,buyer has right to sale option at pre determind price & in call option buyer has right to purchase call option at pre determined price.
That's very wide topic.....you should refer to book for that...basically these are two modes of dealing in stock market,....i think what sharad has mentioned is true but not complete....it's not possible in 3-4 sentence...
To be very concise,
a put is an option to sell an underlying asset (which can be anything like shares or a commodity like gold) at a predetermined price by the buyer of the option to the seller/writer of the option.
a call is an option to purchase the underlying asset (which can be anything like shares or a commodity like gold) at a predetermined price by the buyer of the option from the seller/writer of the option.
Please always keep in mind that the buyer of the option (whether call or put) has always the RIGHT to purchase or sell the underlying asset from/to the seller of the option, as the case may be. This means he may or may not exercise his option ( It depends upon the contract price and current Market price of concerned asset) but a seller/writer of option is always under an OBLIGATION. If buyer choses to exercise call/put, as the case may be, then the seller have no choice but he has to sell/buy the underlying asset at contract price. It is for this right that buyer pays OPTION PREMIUM to the seller of the option at the time of entering into contract.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
25 June 2026
Accounts & Taxation Executive

Dindukurthy & Associates

Hyderabad

MBA

View Details
Company
24 June 2026
Senior Account (VA Client Operations)

Karbon Business

Bengaluru

CA Inter

View Details
Company
01 June 2026
Audit, Taxation & Compliance Executive

R P S K & Associates

Nashik

CA Inter

View Details
Company
ARTICLESHIP 27 June 2026
Article

SNCO

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 28 June 2026
Article Assistant

Sharma Chetan And Company

Gurgaon

CA Inter

View Details
Company
20 June 2026
Chartered Accountant

ANV & Company

New Delhi

CA

View Details
Company
24 June 2026
Chartered Accountant

CA Darshita Shah & Co

Nadiad

CA

View Details
Company
29 June 2026
Accountant (Finance & Compliance)

TRIEYEZ

Kolkata

CA

View Details