You buy a call if you expect the stock price to rise significantly. You pay a fee called a Premium .
If the stock skyrockets, you are obligated to sell the shares at the strike price, missing out on all gains above that level. buying and selling call options
Limited to the premium you paid. If the stock doesn’t reach the strike price by expiration, the option expires worthless, and you lose 100% of your investment. You buy a call if you expect the
Note: Only sell "Covered Calls" (where you already own the shares) to limit risk. Selling "Naked Calls" has infinite risk and is not recommended for beginners. Limited to the premium received. 4. Key Terms to Know Limited to the premium you paid
You don't have to wait for expiration. You can "sell to close" a bought call or "buy to close" a sold call at any time to lock in profits or cut losses.
You sell (or "write") a call if you think the stock will stay flat or drop. You receive the Premium upfront from a buyer.
The stock price rises above your strike price plus the premium you paid (the Breakeven ).