What is the difference between a put and a call option?

Put option and call options are two type of transactions
taking place with respect to trading in stocks and commodities, which are collectively
called options.

An option is a contract that gives the
buyer (holder) of the option the right, but not the obligation, to sell an asset like a
stock or a commodity at an agreed price and time in future from the seller (writer) of
the option. In call option the purchaser of the option has the right to buy the agreed
asset, from the seller of the option, at an agreed price and and time. The cost of the
total transaction (for example 100 shares at a set price) is called option premium:
" href="http://www.investorwords.com/3487/option_premium.html">The amount per share
that an option buyer pays to the seller."

In put
option the seller (writer) of the option giver the seller (holder) of the option the
right, but not the obligation, to sell to the writer an asset at agreed price and time.
In this case also the cost of the total transaction is called the
premium.