This allows them to sell the stock at a higher price, making a profit. On the other hand, a call option gives the holder the right to buy a stock at a stated price within a fixed time period.
A put option, in simple terms, is a contractual agreement that grants the holder the authority to sell a stock at a predetermined price within a specific timeframe. This financial instrument is often used by individuals who anticipate a potential decrease in a stock's value. By exercising a put option, the holder can sell the stock at a higher price, resulting in a profitable outcome. In contrast, a call option provides the holder with the option to purchase a stock at a specified price within a fixed period.
