Question

Explain the difference between a call option and a put option. Would you use options in your personal investment portfolio?

an answer that does not already exist on chegg

A substantial initial response comprising a minimum of 100 words is required.

Answer 1

Call option and put option both are the type of derivative instruments which means that they derive their value from their underlying securitites.

Options give the right to a buyer to purchase or sell the underlying at a specified price which is known as exercise price on a spedcified date.

Call option gives the right to buy the underlying whereas put option gives the right to sell the underlying. They are bith traded in lots which is generally 100 quantity of a share.An call option buyer have a bullish stance on the stcok whereas the put option have a bearish stance on the stock.