What Are Call Options?

A short tutorial, covering the basics of Call Options by Trader - Turned - Teacher, Imran Lakha.

In this easy to understand tutorial, the following points are covered:


  1. A Call is the right, but not the obligation, to buy an underlying for a fixed price (strike) at a given maturity date

  2. Non-linear pay off is unlike stock/future position

  3. It will cost a premium to buy it

  4. If premium = 5, break even is (strike + premium) = 105.

  5. You will start to make make PNL above 105 in the stock

  6. Most popular use of Calls is selling against existing stock positions to earn income (Covered Call Writing)

  7. Therefore we have a natural supply of Upside Calls

#CallOptions #OptionsTrading #CallWriting #Trading #StockTrading #TradersThatTeach #FutureTrading

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