The stock stays below the strike price. You keep the entire premium as profit.
Short-term dates (weeks) are cheaper but riskier; long-term dates (months/years) give you more time to be right.
Use a Limit Order to ensure you pay or receive the specific price you want.
You buy a call if you expect the stock price to rise significantly. You pay a fee called a Premium .
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
Theoretically unlimited. As the stock goes up, the value of your option increases.
A is a contract that gives the buyer the right (but not the obligation) to buy 100 shares of a stock at a specific price ( Strike Price ) before a certain date ( Expiration ). 2. Buying Call Options (Bullish)