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CE and PE Meaning in Stock Market - Call vs. Put Options Explained

Discover the meaning of CE (Call Option) and PE (Put Option) in the stock market, how they work, and how traders use them for profit.<br>

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CE and PE Meaning in Stock Market - Call vs. Put Options Explained

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  1. CE and PE Meaning in Stock Market - Call vs. Put Options Explained What Is CE in Stock Market? CE stands for Call Option, which gives the buyer the right (but not the obligation) to buy a stock at a predetermined price (strike price) before the expiration date. What Is PE in Stock Market? PE stands for Put Option, which gives the buyer the right to sell a stock at a predetermined price before the expiration date. How Do Call and Put Options Work? ●Call Option: Traders buy CE when they expect the stock price to rise. For example, if you buy a CE for ₹100 and the stock rises to ₹120, you can buy it at ₹100 and sell it at ₹120 for a profit. ●Put Option: Traders buy PE when they expect the stock price to fall. For example, if you buy a PE for ₹100 and the stock falls to ₹80, you can sell it at ₹100 and buy it back at ₹80 for a profit. Key Differences Between CE and PE Aspect Call Option (CE) Put Option (PE) Buy at strike price Sell at strike price Right Bullish (price rise) Bearish (price fall) Expectation Limited to premium paid Limited to premium paid Risk Understanding CE and PE is crucial for traders looking to explore derivatives and advanced trading strategies.

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