What is PE and CE fund in share market?

 PE AND CE IN STOCK MARKET

Option Trading is full of difficulties for those people who are not from finance background. There are so many terms, which is very difficult or hard to learn and understand. Some basics terms of Option Trading are PE and CE. If you are a beginner in Stock market you will think, what is CE and PE?

In this article we will discuss about CE and PE in details. So, Let's start with discussing CE and PE.

Table of Contents     1. What are CE and PE?     Meaning of CE?     When to buy Call Option?     2. What is PE?     Meaning of PE     Things to keep in mind while buying a Put Option?     3. Conclusion     4. FAQ

What is CE?

CE is a short form of Call Option. The real full form of CE is Call Eurpean. They are the investment contacts that provide Option buyer , the right to buy the underlying asset, but not the commitment, to purchase a stock. The basic asset is a share, bonds and commodity. When the value of share rises, the call buyer gains profit.

When to buy Call Option? 

Traders buy a call option, if they expect the underlying future prices will higher. Investors buy call when they are bullish on a stock. Call Option helps to reduce the Maximum loss that an trader may incur. The opening time 9:30 am to 10:30 am (Eastern Time) period is one of the best hours of the day for intraday trading. It offers the biggest moves in the shortest amount of time.

What is PE?

PE is the short form of Put Option. The real full form of PE is Put European. Put Option is a contract that gives you the right to sell the Stock.

Meaning of PE

We will understand Put Option by an example: Suppose by purchasing a put option for $5, now you have the right to sell 100 shares at 100$ per share. If ABC company's stock drops to $80 then you could exercise the option and sell 100 shares at $100/ share. Here you will earn $1500  profit.

 Things to keep in mind while buying a Put Option?

1.The duration of time you plan for the trade

2. The amount of money you can allocate toward buying the option

3. The length of move you expect from the market.

Conclusion: 

This is all about CE and PE, where you learnt about Call Option and Put Options. I hope you have cleared your doubts on CE and PE.

 FAQ

1. Full form of CE and PE in Stock Market.

CE: Call European and PE: Put European

2. What is CE and PE?

CE is Call Option and PE is Put Option.

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Call Option and Put Option