Option Trading Details
The call option is the right to buy the underlying security at a certain price on or before a certain date.
You would buy a call option if you anticipated the price of the
underlying security was going to rise before the option reached
expiration. For example:
Company XYZ in trading at $25 per share and you believe the stock is headed up. You could buy shares of the stock or you could buy a call option. Say a call option that gives you the right, but not the obligation, to buy 100 shares of XYZ anytime in the next 90 days for $26 per share could be purchased for $100.
If you are right and the stock rises to $30 per share before option expires, you could exercise your option and buy 100 shares at $26 per share and sell them for an immediate profit of $3 per share ($30 - $26 = $4 - $1 for the option = $3 per share profit).
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
Option Trading
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