I’ve been trading for a while now, but I still get confused about calls and puts sometimes.
I know the basics, but when it comes to actually placing trades, I second-guess myself.
Anyone have a simple way to remember the difference? Or some real-world examples that might help it stick?
Think of calls as betting the price will rise, and puts as betting it’ll fall. Helps to picture it like buying or selling a house.
With calls, you’re locking in a purchase price now, hoping the market value goes up later. Puts are the opposite - you’re guaranteeing a sale price, expecting the value to drop.
Personally, I use price action and support/resistance levels to decide which way to go.
Calls and puts are clear once you get the hang of it. I see calls as a bet on rising prices. You are essentially locking in a buying price when you think the market will push up. On the other hand, puts are for when you expect a drop. It is like setting up a sale price in advance. In my trading, I rely on clear chart trends. When an uptrend forms, I use calls and if resistance hints a drop, I lean into puts. Keep your analysis simple and stick with the trend.
Calls burned me bad when I first started. Lost 50% on AAPL calls thinking earnings would soar.
Now I stick to puts on overbought stocks. Last month, caught TSLA at the top with puts. 30% gain in 2 days.
Key is patience. I wait for clear setups, not chase every move.
Call: right to buy at set price. Put: right to sell at set price.
Key factors:
• Market direction
• Strike price
• Expiration date
Risk management crucial. Use stop losses.
RSI’s my go-to for quick trades. Over 70, I buy puts. Under 30, calls. Made decent profits last month doing this.