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Saturday, May 1, 2010

What is a “put” or a “call” ?

“what is a put?” or “what is a call?”

Puts and calls are terms used when buying or selling options

Buying an option is known as a call and allows you to simulate a long position on a stock, similarly a put enables you to simulate shorting a stock

A call option Is a contract that allows the buyer to buy a stock at specified price at any given time during the time span of the option

A put option Is a contract that allows the buyer to sell a stock at specified price at any given time during the time span of the option

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