Type of Options
There are two primary types of options: calls and puts.
You buy a call if you think the price of the underlying stock is going to go up. You buy a put if you think the
price of the stock is going to go down.
Calls: Buying a call gives you the right, but not the obligation to buy the stock at a certain
time (the expiration date) at a certain price (the strike price).
Puts: Buying a put gives you the right, but not the obligation to sell the stock at a certain
time (the expiration date) at a certain price (the strike price).
Another basic type of option is LEAPS, an acronym for Long-term Equity Anticipation Securities.
These are call and put options bought for a long period of time, as much as 30 months into the future. It gives
the purchaser an excellent way to control a stock for a long time, without paying the high price of stock ownership.
Students at BetterTrades will learn more about calls and puts when taking the options trading classes.
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