====== Call/put Options ======


^ Position ^ Primary Purpose / Outlook ^ Market Condition at Expiration ^ Result ^ What You Should Do ^

| **Buy Call** | **Bullish:** Profit from a big price increase with limited risk. | Stock Price **>** Strike Price *(ITM)* | **Profitable** | **Sell to Close** to take cash profit, OR let your broker automatically buy the 100 shares. |
| **Buy Call** | **Bullish:** Profit from a big price increase with limited risk. | Stock Price **<** Strike Price *(OTM)* | **Worthless** | **Do nothing**. The contract expires. You lose only your upfront premium. |
| **Buy Put** | **Bearish:** Profit from a price drop, or hedge/insure shares you own. | Stock Price **<** Strike Price *(ITM)* | **Profitable** | **Sell to Close** to take cash profit, OR let your broker automatically sell the 100 shares. |
| **Buy Put** | **Bearish:** Profit from a price drop, or hedge/insure shares you own. | Stock Price **>** Strike Price *(OTM)* | **Worthless** | **Do nothing**. The contract expires. You lose only your upfront premium. |
| **Sell Call** | **Neutral/Bearish:** Income generation (collect premium) on flat or falling stock. | Stock Price **>** Strike Price *(ITM)* | **Loss** | **Buy to Close** early to minimize damage, OR get **assigned** (forced to sell 100 shares at strike price). |
| **Sell Call** | **Neutral/Bearish:** Income generation (collect premium) on flat or falling stock. | Stock Price **<** Strike Price *(OTM)* | **Profitable** | **Do nothing**. The contract expires worthless. You keep 100% of the upfront premium. |
| **Sell Put** | **Neutral/Bullish:** Income generation, or acquire stock at a lower desired price. | Stock Price **<** Strike Price *(ITM)* | **Loss** | **Buy to Close** early to minimize damage, OR get **assigned** (forced to buy 100 shares at strike price). |
| **Sell Put** | **Neutral/Bullish:** Income generation, or acquire stock at a lower desired price. | Stock Price **>** Strike Price *(OTM)* | **Profitable** | **Do nothing**. The contract expires worthless. You keep 100% of the upfront premium. |