What is a call option?

You might have heard about option contracts in the past. There are calls and puts. When you’re buying a call, it means you’re looking for the stock to go to the upside, which is a bullish outlook.

You can also sell a call, which means you’re looking for the stock to go down. You don’t need to own inventory or anything like that in order to sell or buy calls.

When you buy a call option contract, you’re playing against time. That’s why many people lose so much money when it comes to options.

When buying a call, you have unlimited profit potential because you’re looking for an upside move. That’s a lot of times why people buy call contracts, however, this is not always the most profitable thing to do, simply because you need that stock to move.

If the stock price stands still, you lose money. If it goes down, you lose money too. The only time that you make money is if it goes up and in your favor quite a bit. And that’s one of the tough things about buying call contracts.

In this video, I’m going to show you the risk profile picture of buying a call. This shows you where your profit and loss ultimately is when you buy a call. Also, we’re going to look at how to buy a call option contract on a trading platform. You’ll take a look at what it looks like when you buy a call option contract, how it works, and how you can make money with it.

Posted at: http://tradersfly.com/2017/12/buying-a-call-option/

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26 COMMENTS

  3. You are a God ? I've spent hours trying to figure this out and you did it in ten min. All the other videos have too much ego this is pure knowledge and straight forward.. Lol other guys be talking about they house and car lol i could careless.. Thanks again

  16. Maybe it gets more complicated or makes more sense when you can understand where the brokage firm gets the money to pay you off if your call is correct. I don't think a brokage is in the Casino business??????

  20. A call option is when you call a number and get an option to press any given button key to proceed to the next automated menu. Hope that helped you out.

  23. He has to explain everything 3 or 4 times like we're all dum dums. If you are that dense where you cant get the gist of options trading after 2 different explainations then you are not mentally agile enough for something like options trading.

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