Call Options vs. Put Options

• Call Options - The buyer of a call option purchases the right to buy 100 shares of the underlying stock at the stated exercise price. Thus, the buyer of 2 IBM May 160 call options has the right to purchase 200 shares of IBM at $160 up until May expiration date.

• Put Options - The buyer of a put option purchases the right to sell shares of the underlying stock at the contracted strike price. Thus, the buyer of one IBM May 160 put has the right to sell 100 shares of IBM at $160 any time prior to the expiration date.

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