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Understanding Options 2E, 2nd Edition by Michael Sincere

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12

Step-by-Step: Buying Calls

If you got through the last chapter without too much difficulty, you’re doing great. Learning how to price options and determine the chances of profitability are extremely challenging concepts, even for the experts. As you gain more experience, you’ll pay more attention to option pricing before taking on a position. Nevertheless, try to learn the concepts before you place your first trade.

And now, the most exciting part is actually signing on to the brokerage firm’s website and buying call options. As I’ve said before, brokerage firms have invested millions of dollars in making it easy to buy and sell options.

Before we get to the mechanics of buying calls, however, I discuss some of the risks. Once again, I’m not ...

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