How To Buy Calls -

The earnings report drops, and it’s a massive success. Netflix stock surges to . Because you own the "right" to buy those shares at $400 , your contract is now "in-the-money".

Each share in your contract is now worth $20 more than your strike price ($420 - $400). how to buy calls

If the earnings report had been a dud and the stock stayed at or dropped, your option would have expired worthless . Unlike a stock owner who can wait for a recovery, an option buyer has a "ticking clock"—once that expiration date hits, your $600 is gone forever. The earnings report drops, and it’s a massive success

Theoretically unlimited if the stock price skyrockets. The "Aha!" Moment: Leverage in Action The earnings report drops