🔑 Key Differences: Call vs Put Options
📈 Call Option
- • Right to BUY at strike price
- • Bullish - profits when price rises
- • Best for uptrend markets
- • Unlimited profit potential
- • Limited loss (premium only)
- • Example: Nifty 22,000 Call
📉 Put Option
- • Right to SELL at strike price
- • Bearish - profits when price falls
- • Best for downtrend markets
- • Profit up to strike price
- • Limited loss (premium only)
- • Example: Nifty 22,000 Put
💡 Real Example: Call vs Put with Nifty
Scenario: Nifty at ₹22,000
You buy both Call and Put options with strike ₹22,000, premium ₹150 each, lot size 50 units.
Profit = (22,500 - 22,000) × 50 - 7,500 = ₹17,500
Profit = (22,000 - 21,500) × 50 - 7,500 = ₹17,500
🎯 When to Use Call vs Put Options
✅ Use Call Options When:
- • Market is in uptrend
- • You expect price to rise
- • Support levels are strong
- • Bullish news/earnings expected
- • Breakout from resistance
✅ Use Put Options When:
- • Market is in downtrend
- • You expect price to fall
- • Resistance levels are strong
- • Negative news expected
- • Breakdown from support
- • Protecting portfolio (hedging)
❓ Frequently Asked Questions
Which is better for beginners: Call or Put?
Start with Call options in uptrend markets. They're easier to understand and markets tend to rise over time. Once comfortable, learn Put options for bearish strategies.
Can I buy both Call and Put together?
Yes! This is called a "Straddle" strategy. You profit if price moves significantly in either direction. Useful when you expect volatility but unsure of direction.
Which has higher profit potential?
Call options have unlimited profit potential (price can keep rising). Put options have profit limited to strike price (price can't go below zero).
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