A call option is a financial contract that gives the buyer the right, but not the obligation, to buy an underlying asset (such as a stock) at a predetermined price (called the strike price) within a specific time period before the option expires. Buyers of call options typically expect the price of the asset to rise, allowing them to purchase it at a lower strike price and potentially sell it at a higher market price for a profit

. A put option is the opposite: it gives the buyer the right, but not the obligation, to sell the underlying asset at the strike price within a specified timeframe. Buyers of put options generally anticipate a decline in the asset's price, enabling them to sell it at a higher strike price than the market value, thus making a profit. Puts can also be used to hedge against losses in assets already owned

. Both call and put options involve paying a premium upfront to acquire these rights. If exercising the option is not profitable, the buyer can let it expire, losing only the premium paid. The sellers (writers) of these options have the obligation to fulfill the contract if the buyer chooses to exercise the option

. In summary:

• Call option : Right to buy an asset at a set price before expiration; profits if the asset price rises.
• Put option : Right to sell an asset at a set price before expiration; profits if the asset price falls.

These options are widely used for speculation and hedging in financial markets