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Why would people - buy put options - sell call options - sell put options with...

Why would people

- buy put options

- sell call options

- sell put options

with simple explanations

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Answer #1

Buy PUT OPTIONS :- Put Options are bought with the expectations that the Price of the underlying stock will fall. The Put Option gives profits only when the Stock Price of the underlying stock falls. So, people buy put option when they are convinced that stock prices will fall.

Sell CALL OPTIONS : - Call Option are sold when the expectations are that the price of the Underlying stock will either be below the Strike Price or Fall but will not increase. Call options are sold with an objective to earn the profits when the Option will lapse for the Call option buyer.

Sell PUT OPTIONS : - put Option are sold when the expectations are that the price of the Underlying stock will either be above the Strike Price or rise but will not decrease. put options are sold with an objective to earn the profits when the Option will lapse for the put option buyer.

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