Think of it like a . You are betting that the stock price will rise significantly before the reservation expires. Why Buy a Call Option?
If the stock price skyrockets, your profit is theoretically unlimited. How the Trade Works buying an option call
To make a profit, the stock price must rise above your (Strike Price + Premium Paid). Stock price is above break-even Think of it like a
You can control 100 shares of a high-priced stock for a fraction of the cost of buying the actual shares. If the stock price skyrockets, your profit is
Buying a is a "bullish" strategy where you pay a fee (the premium ) for the right—but not the obligation—to buy 100 shares of a stock at a set price (the strike price ) before a certain date (the expiration ).
The most you can lose is the premium you paid, unlike buying a stock where you could lose your entire investment if the price drops to zero.
You can exercise the option to buy shares at the lower strike price or sell the option itself for a profit.