Call Option - Buying A

AI responses may include mistakes. For financial advice, consult a professional. Learn more

"There," Leo thought. "I’ve bought the , but not the obligation , to buy those shares at $160, no matter how high the price goes." buying a call option

Three weeks later, the product launch was a sensation. Nebula Tech’s stock surged to . AI responses may include mistakes

He clicked "Sell to Close," watching his initial turn into $4,000 . He hadn't needed $15,000 to participate in the gain; he just needed a well-timed contract and a bit of leverage . "I’ve bought the , but not the obligation

Leo sat in his home office, staring at the ticker for . The stock was trading at $150 , but with a major product launch scheduled for next month, Leo was convinced it would skyrocket. He didn't want to buy 100 shares outright—that would cost him $15,000. Instead, he decided to buy a call option .

He opened his brokerage app and selected the call with an expiration date two months away. The premium was $5 per share. Since one option contract represents 100 shares , he paid $500.