Glossary Detail: Calls and Puts
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Backtesting Calls and Puts on High-Beta Names
The two fundamental option types. Calls give the right to buy; puts give the right to sell at a specified price.
Further Details:
A call option gives the holder the right (not obligation) to buy the underlying stock at the strike price before expiration. A put option gives the right to sell. Buyers pay a premium for this right; sellers (writers) collect the premium and take on the obligation.