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In the legal operation of trading, Calls and Puts are one of the methods utilized by investors. Puts allow the investor to sell stock within a predetermined period of time at a predetermined price. The investor who desires to do so can use Calls to acquire stock in a like manner.

At the time they are drawn, Put and Call give value close to the current market stock rate and usually lasts to a period of numerous months. This means they have expiration.
The variation of the two is that they trade oppositely.

For example, an investor would opt to purchase Puts with target that the stock price will go down while another one targeting the stock price to rise will go for Calls. That means the Calls gain value when the principal security has risen up while Puts add value as the principal security moves down and reduces when it moves up.

Both methods of trading can yield a profit for the investor. The savy investor can anticipate the moves of the market and use Calls and Puts to increase their bank account. The biggest danger is not watching the expiration date of the agreement. These date are set in stone and should one be missed, or purchases not made within the limits of the agreement, an investor risks loosing their investment.

It is therefore of paramount importance to always check the expiry dates.
The investment is not limited to large investors only therefore even individual investors can take advantage. Another limitation is that, for you to make profit, you cannot buy a Put on a self owned stock.

If a Put is purchased on a stock not owned by the investor, and later during the trade period the individual purchases some of the stock, the Put can be traded. If the stock happens to fall to a lower price than that specified in the Put, it is fine to purchase more of that stock outside of the agreement. A higher profit is possible in this kind of situation.

Often, the profit from this investment is used to outweigh the debt an investor may have from purchasing stock outside the agreement. Before investing in Calls and Puts, always learn as much as possible about the limits of the system. This can be an expensive game to learn, with as much to lose as to gain.

Calls and Puts is a technique of investing that can benefit either the large or small investor. There are many different methods of approaching investing that can be of great value as long as the investor understands the risk. Calls and Puts does not require large amounts of cash to begin and can be ideal for the small investor.