The distinction between a call option and a put option. Introduction: Call option: It gives the right, but not the necessity, to procure the underlying asset for the pre-decided strike price at a specified date. Put option: It provides the right, but not the obligation to sell the underlying asset at a specified date, for the pre-decided strike price.

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Chapter 19, Problem 11DQ

Summary Introduction

To explain: The distinction between a call option and a put option.

Introduction:

Call option:

It gives the right, but not the necessity, to procure the underlying asset for the pre-decided strike price at a specified date.

Put option:

It provides the right, but not the obligation to sell the underlying asset at a specified date, for the pre-decided strike price.

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