Calls & Puts

beginner7 min read

The two building blocks of every options strategy ever devised. Get these cold.

There are only two types of option, and every strategy ever invented is built from them: the **call and the put**. Master what each one is and you have the entire alphabet of options.

Call option — the right to buy the underlying at the strike. You buy a call when you’re bullish (expect the price to rise) — it locks in a low purchase price.
Put option — the right to sell the underlying at the strike. You buy a put when you’re bearish (expect the price to fall) — it locks in a high selling price.

Here’s the memory hook that makes calls and puts click: a **call** lets you “call away” (buy) the asset — you want it to go up; a **put* lets you “put” (sell/dump) the asset onto someone — you want it to go down*. Call = right to buy = bullish. Put = right to sell = bearish. Once these two are reflex, you can read any options position by decomposing it into calls and puts. They are the two LEGO bricks behind iron condors, spreads, straddles — everything. Get these cold and the rest is just combinations.

ExampleBullish on a stock at ₹1,000? Buy a ₹1,000 *call — if it rises to ₹1,200 your right to buy at ₹1,000 is worth ₹200. Bearish instead? Buy a ₹1,000 put* — if it falls to ₹800 your right to sell at ₹1,000 is worth ₹200. Same stock, opposite views, opposite instruments.

Key takeawayThe two building blocks: a *call is the right to buy (bullish — you want the price up); a put* is the right to sell (bearish — you want it down). Every options strategy is a combination of calls and puts, so make these two reflexive.

FAQs

Can I sell a call or put instead of buying one?

Yes — for every option there’s a buyer and a seller. Buying a call/put gives you the right (bullish/bearish respectively); *selling* a call is bearish-to-neutral and selling a put is bullish-to-neutral, with the opposite risk profile (premium income but obligation). The buyer-vs-seller lesson covers these seats in detail.