Call And Put Options

This question tests your understanding of basic derivatives terminology, especially the difference between the right to buy and the right to sell an underlying asset. It also checks whether you can connect each option type to the market view it is designed to express, since interviewers often want to see that you understand how options are used for speculation and hedging in practice.

In investment banking interviews, this kind of question matters because options are a core building block of capital markets and sales and trading discussions. A strong answer shows that you understand the payoff logic behind options, how investors use them to express a view on price direction, and why the same instrument can serve both risk management and directional trading purposes.