A put option is illustrated by looking at stock X, which is normally traded at $20 per share, but for a month, it can be sold at $2 per share. A call option example is a stock that can be purchased at a certain price for a certain amount of time before the price goes back up, according to Investopedia. The put option pertains to the sale of stock and the call option relates to the purchase of stock.Continue Reading
Call options give owners the right to buy shares of a stock at a certain rate. The "sale" only lasts for a pre-determined amount of time. A call option, according to the website Call Options, has to have a strike point and expiration date and only gives people the option to buy a particular stock.
A put option is the opposite of a call option because it gives stock owners the option to sell at a discounted rate, rather than purchase stocks. Stock owners can buy a put option stock for a pre-determined amount of time at a pre-determined price. Although a put option gives the seller the right to sell the stock, there is nothing that says that particular stock must be sold. As the title suggests, it is the "option" to sell.Learn more about Investing