CE and PE are terms used in the stock market for options trading. They stand for Call Option European-style settlement and Put Option European-style settlement, respectively. Heres a brief explanation of what they mean:

• CE (Call Option): This is an investment contract that grants the option holder the right, but not the obligation, to purchase an asset, such as a stock, bond, or commodity, at a predetermined price within a specified time frame.

• PE (Put Option): This is an investment contract that provides the option holder the right, but not the responsibility, to sell an underlying security at a specific price, known as the strike price, within a specified time frame.

Options trading can offer the potential for quick profits, but it is also a high-risk investment strategy that can lead to significant losses. Before venturing into the world of options trading, it is crucial to have a thorough understanding of terms like CE and PE. These options provide opportunities to leverage positions and capitalize on market movements. CE holders anticipate rising prices above the strike price, exercising the option “in the money.” Conversely, PE holders anticipate falling prices below the strike price to profit. Both options involve a premium paid to the option seller and can be utilized for various investment strategies.

CE and PE in the stock market can also be used to reduce risk on stock investments, which is called hedging. Hedging is a risk management strategy used by investors to protect against potential losses in the stock market. Call options (CE) and put options (PE) can be employed as hedging tools to mitigate risks.