What Is the Difference between a “Call Option” and a “Put Option”?

A Call Option gives the holder the right, but not the obligation, to buy an underlying asset at a specified price (strike price) before a specific date. A Put Option gives the holder the right to sell the underlying asset at the strike price before expiration.

Call options profit if the price rises; Put options profit if the price falls. They are fundamental tools for hedging and speculation in financial derivatives.