Buying And - Selling Call Options
Use a Limit Order to ensure you pay or receive the specific price you want.
The stock price rises above your strike price plus the premium you paid (the Breakeven ). buying and selling call options
Theoretically unlimited. As the stock goes up, the value of your option increases. Use a Limit Order to ensure you pay
You buy a call if you expect the stock price to rise significantly. You pay a fee called a Premium . As the stock goes up, the value of your option increases
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.
If the stock skyrockets, you are obligated to sell the shares at the strike price, missing out on all gains above that level.