Buying And Selling Calls And Puts -

: Realized if the stock price drops below the strike price minus the premium paid. 3. Selling Options (Writing "Short")

When you buy an option, you have the , but not the obligation , to trade the stock. Long Call (Bullish) Goal : You expect the stock price to rise . Right : You can buy the stock at the strike price. Risk : Limited to the premium paid. buying and selling calls and puts

Before placing a trade, you need to understand the basic mechanics: : Realized if the stock price drops below