Should you buy call and put options?

The risk of buying both call and put options is that they expire worthless because the stock doesn't reach the breakeven point. In that case, you lose the amount you paid for the premium. It's also possible to sell call and put options, which means another party would pay you a premium for an options contract.

What are puts and calls?

Puts and calls are the types of options contracts, and both types have a buyer and a seller. So while most financial markets have only two types of participants — buyers and sellers — the options market has four: call buyers, call sellers, put buyers and put sellers.

What is the difference between call options and put options?

Call options are considered bullish, as they profit from an increase in the underlying asset price. In contrast, put options are considered bearish, as they profit from a decrease in the underlying asset price. The price of an option is determined by the underlying asset, the strike price, the expiration date, and market conditions.