Call vs Put Options Analysis

Understand the structural differences between Call (CE) and Put (PE) options contracts.

Call Options (CE - Call European)

A Call Option gives the buyer the right, but not the obligation, to purchase the underlying asset at a specified strike price prior to or on the expiration date.

Buyer Outlook: Expects underlying price to rise above strike + premium paid.
Seller (Writer) Outlook: Expects underlying price to stay below strike price.
Maximum Loss for Buyer: Capped at option premium paid.

Put Options (PE - Put European)

A Put Option gives the buyer the right, but not the obligation, to sell the underlying asset at a specified strike price prior to or on the expiration date.

Buyer Outlook: Expects underlying price to fall below strike - premium paid.
Seller (Writer) Outlook: Expects underlying price to stay above strike price.
Maximum Loss for Buyer: Capped at option premium paid.

Comparing Call and Put Market Indicators

By comparing aggregate Call Open Interest against Put Open Interest, market analysts calculate the Put-Call Ratio (PCR) to gauge overall market positioning.

Read complete comparison article: Call Options vs Put Options In Depth →