: One contract typically controls 100 shares, allowing for significant market exposure with less upfront capital than buying shares outright. Basic Strategies
: The cost you pay (as a buyer) or receive (as a seller) for the contract. OPTION TRADING
: The date the contract expires. If not used by then, it usually becomes worthless. : One contract typically controls 100 shares, allowing
: The agreed-upon price at which the asset can be bought or sold. OPTION TRADING
: You buy a call if you expect the stock price to rise. Your risk is limited to the premium paid, but potential profit is theoretically unlimited.
: You own the stock and sell a call against it. This generates immediate income (the premium) but caps your potential profit if the stock price soars.
