Wealthy Investor Intro to Call Option Buying
What is a call option?
A call option is the right not the obligation
to purchase a stock at given price called the strike price.
Call options are a from of leverage used by advanced traders.
XYZ Stock Trading at $50
100 shares of XYZ stock = $5,000
By contrast, one contract of an XYZ Call Option is only $500
| XYZ Stock | XYZ Option |
| 50 | 5.00 or 500 per contract |
| 51 | 5.50 or 550 per contract |
| 52 | 6.00 or 600 per contract |
| 53 | 6.50 or 650 per contract |
Notice how one $500 contract becomes $650 when the stock increases just $3 bucks
Ten contracts for $5,000 become worth $6,500. That's a net profit of $1,500 when the stock increases just $3 bucks
The Wealthy Investor Guidelines to Option Buying
We only buy options on Dow Stocks & S&P stocks in strong up trends
To Trade Options Successfully, you'll need a financial education.
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