Buying And Selling Stock Options May 2026

You expect the stock price to rise . It grants the right to buy 100 shares at the strike price.

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

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

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 It grants the right to sell 100 shares

You expect the price to stay flat or fall . You are obligated to sell your shares if the buyer exercises their right. Put Options