What are Puts and Calls

PUTS AND CALLS – OPTIONS

What are puts and calls? In the trading arena, these are simply predetermined trade agreements. Take a look at the Option chart for PCG.

The graphic image above contains information about the available stock options for PCG stock. In the upper left, the red box indicates PCG’s current stock price of $9.65. I have drawn a line to the center of the option chain that shows where the stock is currently trading. The shaded area above the line and to the left are the active Calls. The shaded area below the line to the right are the active “Puts“. The numbers is the Center called the “Strike Price” which represents the price in which a contract may be bought or sold. A Contract consists of 100 shares of stock at a set price that is good through the expiration date.  The top left corner shows the expiration date to be PCG Dec 13, 2019.

When trading options a contract is initiated in one of two ways.  “Buy to Open” a Call or Put contract and the other is a “Sell to open” Call or Put contract  gives the buyer of the “Option” to purchase the stock at a set price, as long as it is above the strike price.  The benefit of this contract is that the buyer does not have to buy the stock if the price goes down.  It allows the buyer a This is a “Wait and See” type of “Bought to open”selected, the buyer has the “option” to buy or sell 100 shares of PCG stock by Dec 13, 2019 so long as “it is i The graphic image above contains all the necessary information about tjhe available stock options for PCG stock. In the center PCG’s current stock price is boxed in red. I have drawn a line to the center of the option chain that shows where the stock is currently trading. The shaded area above the line and to the left are the active Calls. The shaded area below the line to the right are the active “puts”. The numbers is the Center called “Strike Price” represents the price in which a contract may be bought or sold. A contract consists of 100 shares of the companies stock at the indicated strike price.ion date. The top left corner shown the expiration date to be PCG Dec 13, 2019. If selected, the buyer has the “option” to buy or sell 100 shares of PCG stock by Dec 13, 2019 so long as “it is in the money”

A $9.50 “Call” option is ‘in the money” if the current stock price is at or above the strike price of $9.50. Similarly, a “Put” option is “in the money“ if the current stock price is at or below the strike price of $9.50 .