If the price of a security is showing an upward trend, who would gain - a put option holder or a call option holder?

Question

Accepted Answer

Call option holder would gain.

A call option gives the holder the right to buy the security at a predetermined price, known as the strike price.
If the price of the security is showing an upward trend, the call option holder can exercise their option and buy the security at the lower strike price, then sell it at the higher market price for a profit.
On the other hand, a put option gives the holder the right to sell the security at a predetermined price.
If the price of the security is showing an upward trend, the put option holder would not exercise their option as they can sell the security at a higher market price.
Therefore, the call option holder would gain in this scenario.

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