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Options Trading by Ann Logue

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CHAPTER8

Call Strategies

In This Chapter

  • How call options work
  • Potential payoffs
  • Using calls to speculate
  • Hedging with call options

Calls are options that give you the right—but not the obligation—to buy something in the future at a price agreed upon today. You can exercise that right at any point until the option expires. Calls are bets that the price of the underlying asset will be higher than the strike price by the time the expiration rolls around. That’s why calls are often considered to be a bullish derivative.

At the most basic level, people buy calls as bets that the underlying will increase in price. They are hoping that the call ...

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