A call option gives the buyer the right (but not the obligation) to buy an asset at a specific strike price before expiration. You might buy a call if you expect the price to go up, allowing you to profit by buying lower and selling higher.
You may wonder — why not just buy the stock? [See More]
Selling a call means you expect the stock to remain flat or fall. You collect a premium from the buyer. If the stock rises too much, you risk having to sell it at a lower strike price. This strategy is commonly used in a [Covered Call].
A put option gives the buyer the right (but not the obligation) to sell an asset at a specific strike price before expiration. Buy a put if you expect the asset's price to fall.
You may ask — why not just short the stock? Good question. [Compare Here]
Selling a put means you think the stock will stay flat or rise. If the price drops, you may be forced to buy the stock at the strike price.