RE: Options8 Dec 2021 12:26
Thanks Alphageddon. Wildstar, I believe a call option is the purchase of the Right by not the Obligation to buy an asset at a "strike price" at a specific time in the future. If the underlying asset is not above the strike price at the option date, the owner of the option usually does nothing and lets the option lapse. In this case, all the purchase price of the option is lost to the purchaser and kept by the seller of the call option. However, if the price goes above the strike price the holder of the call option will use the option to buy. This process has enabled a purchaser of those call options to have access the gains from many more shares than they could otherwise have afforded to hold if they had bought them outright. The call options can be traded up to the moment of the option, so as the asset goes nearer, and hopefully above, the strike price, the value of the call option increases. All IMHO and no form of financial advice whatsoever, just trying to answer your question