A call is an option contract that gives the owner the right, but not the obligation, to buy 100 shares of the underlying stock at a specified price (which is known as the strike price of the call) at any time before a specific time (the expiration date of the call). Read More
A call is an option contract that gives the owner the right, but not the obligation, to buy 100 shares of the underlying stock at a specified price (which is known as the strike price of the call) at any time before a specific time (the expiration date of the call). Bullish investors would use calls because the value of the call should increase if the price of the underlying stock goes up. The potential profits for an investor owning a call are unlimited, because the underlying stock can go up to any price. The maximum possible risk on a call is limited to the total price paid for the option contract. Changes in the price of the underlying stock will lead to a change in the value of the call, as will changes in the volatility of the underlying stock. If… Read More