Buying And Selling Call Options Official

If the stock skyrockets, you are obligated to sell the shares at the strike price, missing out on all gains above that level.

Short-term dates (weeks) are cheaper but riskier; long-term dates (months/years) give you more time to be right. buying and selling call options

A is a contract that gives the buyer the right (but not the obligation) to buy 100 shares of a stock at a specific price ( Strike Price ) before a certain date ( Expiration ). 2. Buying Call Options (Bullish) If the stock skyrockets, you are obligated to

AI responses may include mistakes. For financial advice, consult a professional. Learn more Learn more Stock XYZ is at $100

Stock XYZ is at $100. You buy a $105 Call for $2. If XYZ hits $110, your option is worth at least $5. You turned $2 into $5 (a 150% gain), while the stock only moved 10%. 3. Selling Call Options (Bearish/Neutral)

The stock price is lower than the strike price.

You buy a call if you expect the stock price to rise significantly. You pay a fee called a Premium .