Option Types: Call and Put

1- Call Options

This option type is the right (not the obligation) to buy a stock at a fixed price before the expiration date of the option. A call option is like going long a stock. If the price of the underlying stock goes up the option usually follows.

2- Put Options

The put option is the right to sell a stock at a fixed price before the expiration date of the option. A put option is like selling a stock short. So if an options trader thinks that the price of stock will go down, they may purchase a put option of that stock.