Buying And Selling Calls And Puts May 2026

: Realized if the stock price moves above the strike price plus the premium paid. Long Put (Bearish) Goal : You expect the stock price to fall . Right : You can sell the stock at the strike price. Risk : Limited to the premium paid.

: Realized if the stock price drops below the strike price minus the premium paid. 3. Selling Options (Writing "Short") buying and selling calls and puts

: One standard equity option contract typically controls 100 shares of the underlying stock. : Realized if the stock price moves above

Before placing a trade, you need to understand the basic mechanics: Risk : Limited to the premium paid

When you sell an option, you receive the premium upfront but take on an if the buyer chooses to exercise their right. Short Call (Bearish or Neutral) Options Trading Basics | How to Buy & Sell Calls and Puts