What is the difference between Put Options and Call options?

>>3275269
A put option is the right to sell an asset for a certain price at some point in the future.
A call option is the right to buy an asset for a certain price at some point in the future.

Example: I have a put $50 option on Skynet stock that expires tomorrow. Currently, the stock price is $51, so the option worthless. If the price were to drop to $49 however, I could buy one share for $49 on the open market and then immediately exercise the option to sell it for $50. I would pocket the dollar.

A call option is just the opposite. Suppose the stock price is still $51, but this time I have a call $50 option. Then exercising the option would net me a dollar (buy for $50 through the option and immediately sell for $51 on the open market). If the stock price increased to $55, it would net me 5 dollars. If the stock price dropped below $50, it would be worthless.

There are some differences between different types of options (European, American etc) but this is the idea behind all of them.

>>3275269
The right (but not an obligation) to buy or sell, respectively.

Call = make money if it goes up. If it goes down, your option is worthless (e.g. you negotiated to buy at 50 but the price on the open market is 45).
Put = make money if it goes down. If it goes up, your option is worthless (e.g. you negotiated to sell at 50 but you can sell on the open market for 55).

>>3276168
>>3275941
Awesome, thank you for the explanation.

I've only recently started looking at investing, I'm not expecting to become the wolf of wall street. However, I would like to get to a point where I understand how the market works and eventually make a profit.

I have another question if you guys dont mind answering.

>What are derivatives in laymen terms?
Also,
>Are securities just another word for stocks?

>>3276755
>derivative
Anything that derives its value from some other asset.e.g. the stock attached to your call option. The call option is a derivative, the stock is the underlying asset. The call option itself might cost $5, but the stock is worth $90 (the price of the option would be calculated based on what the stock is expected to be worth in 6 months).