## Core Concepts - **Call Option (看涨期权)** — the right to **buy** the underlying asset at the strike price - **Put Option (看跌期权)** — the right to **sell** the underlying asset at the strike price - Neither carries an obligation. The worst outcome is losing the **premium (权利金)** paid upfront. ## Moneyness Table (Strike = $150) | | Call (right to buy at strike) | **Put** (right to sell at strike) | | ----------------------- | ------------------------------------------------------------- | -------------------------------------------------------------- | | **In the Money 实值** | Market > Strike — stock at $180, buy at $150, profit $30 | Market < Strike — stock at $120, sell at $150, profit $30 | | **At the Money 平值** | Market ≈ Strike — no meaningful profit | Market ≈ Strike — no meaningful profit | | **Out of the Money 虚值** | Market < Strike — stock at $120, buying at $150 is irrational | Market > Strike — stock at $180, selling at $150 is irrational | > [!tip] Mirror Pattern Call and put are **mirror images**. A call profits when the market **rises above** the strike; a put profits when the market **falls below** it. ITM means the option carries instant exercisable value; OTM means exercising would lose money compared to the open market. ## Mnemonic - **Call = bullish** — you expect price to climb, so you want the right to buy cheap - **Put = bearish** — you expect price to drop, so you want the right to sell dear - **ITM / OTM boundary** — has reality moved in the direction you bet on? ## Four Defining Features of Every Option |Feature|Meaning| |---|---| |**Underlying (标的资产)**|The asset the option is written on (e.g. AAPL, S&P 500, crude oil)| |**Strike Price (行权价)**|The price at which the holder can buy (call) or sell (put)| |**Expiration Date (到期日)**|Deadline to decide whether to exercise| |**Premium (权利金)**|Upfront cost paid by the buyer; non-refundable; the maximum loss| > [!important] Asymmetry Downside is **capped** at the premium. Upside can be **large**. This asymmetry is what makes options interesting.