: You buy a call if you expect the stock price to rise. Your risk is limited to the premium paid, but potential profit is theoretically unlimited.

: You sell a put and set aside enough cash to buy the stock if the price falls to the strike price, effectively getting paid to wait for a better entry point. Risk vs. Reward

: You receive the premium upfront, but you take on the obligation to fulfill the contract. Selling "naked" (without owning the stock or cash) carries potentially unlimited risk if the market moves sharply against you.

: Risk is strictly limited to the premium paid. However, options are time-sensitive; if the stock doesn't move as expected before expiration, the entire investment can be lost.

: You own the stock and sell a call against it. This generates immediate income (the premium) but caps your potential profit if the stock price soars.

: One contract typically controls 100 shares, allowing for significant market exposure with less upfront capital than buying shares outright. Basic Strategies