Buying And Selling Stock Options May 2026

There are two primary types of options, which function differently depending on whether you are the buyer or the seller:

You expect the stock price to fall . It grants the right to sell 100 shares at the strike price, acting like insurance. buying and selling stock options

You expect the price to stay flat or fall . You are obligated to sell your shares if the buyer exercises their right. Put Options There are two primary types of options, which

You expect the stock price to rise . It grants the right to buy 100 shares at the strike price. You are obligated to sell your shares if

You expect the price to stay flat or rise . You are obligated to buy the shares if the buyer exercises their right. Buy vs. Sell Dynamics What are call and put options? - Vanguard

Buying and selling stock options is a versatile way to trade market movements with and defined risk . Unlike owning a stock outright, an option is a contract that gives you the right , but not the obligation , to buy or sell a stock at a specific price ( strike price ) by a certain date ( expiration ). The Core Contract Types