How To Buy Calls Instant

Each share in your contract is now worth $20 more than your strike price ($420 - $400).

You buy with a strike price of $400 that expires in one month. This contract costs you a "premium" of $6.00 per share, or $600 total (since one contract covers 100 shares). Your Risk: The most you can lose is that $600 premium. how to buy calls

Imagine you’re watching a company like Netflix, which is trading at . You’re convinced their upcoming earnings report is going to be a blockbuster. Instead of buying 100 shares for a steep $39,000 , you decide to "buy a call". The Setup: Buying the "Right" Each share in your contract is now worth

Check out these guides to see these concepts in action and avoid common beginner traps: Your Risk: The most you can lose is that $600 premium

The earnings report drops, and it’s a massive success. Netflix stock surges to . Because you own the "right" to buy those shares at $400 , your contract is now "in-the-money".

Theoretically unlimited if the stock price skyrockets. The "Aha!" Moment: Leverage in Action

After subtracting your initial $600 investment, you’ve made a $1,400 profit .