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Call option- The buyer has the Rights to Buy with no obligation.The seller has the obligation to sell at the strike price fixed.The buyer makes a profit(unlimited) which is equal to the difference in amount between the market price(high) and strike price provided the price crosses the strike price and the seller makes profit if the price stays the same or below the strike price which is equal to the premium.
PUT option- The buyer has the Rights to Sell with no obligation.The seller has the obligation to buy at the strike price fixed.The buyer makes a profit(unlimited) which is equal to the difference in the market price(low) and strike price provided the price goes below the strike price.The seller makes a profit if the price stays the same or above the strike price which is equal to the premium.
The premium prices are decided by the market which in turns means fixed by the buyer and seller.
Owners of call options have the right to buy a specified stock Ā at a fixed priceĀ for a limited time (until the option expires).
Owners of put options have the right toĀ sellĀ specified stock at the strike price for a limited time.Ā <b></b><i></i><u></u>
Buyer or seller decides the premium.
Call Option – The buyer has to the right to buy with no obligation
Put Option – The seller has to right to sell with no obligation
Premium is decided by both buyer and seller in the market
Call OptionĀ –Ā Buy with Rights and without obligation
Put Option –Ā Buyer can sell with rights and without obligation
Buyer and seller decides the premium.
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