Options trading involves two types of contracts: call options and put options.
A call option gives the holder the right to buy an asset at a specified price within a certain time frame. This is used when the investor believes the asset's price will rise.
A put option, on the other hand, gives the holder the right to sell an asset at a specified price within a certain time frame. This is used when the investor believes the asset's price will fall.
In summary, the main difference between call and put options lies in the investor's outlook on the asset's price movement - call options are used for bullish expectations, while put options are used for bearish expectations.
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