主题：Call/Put option & Strike Price -- 罗格

To simplify these situation we assume that there's no premium need for both case.

Call option allow you to choose whether or not to purchase the asset.

If you purchased a call option with a strike price K, then at the expiration date, if the price of the stock(St) is greater than your K, then you can buy the asset. Because, the profit of the call option is St - K (If St>K) and 0 (If St<=K).

Put Option allow you to choose whether or not to sell the asset.

In this case, if you purchased a put option with a strike price K, then similiarly, at the expiration date, if the price of the asset(Say St) if less than you K, then you can sell the asset. Because, the profit of the put option is (K - St)(If St<K) and 0 (If St>=K).

PS.Usually, you will puy premium for purchasing a Call/Put option at the beginning, if you choose not to exercise your "option", you will lose your premium.

PS2.If you sell a Call/Put option, you will receive premium from buyer, but at the end you will have to exercise (which means buy or sell) the asset at the strike price in your agreed option.