Buying And Selling Calls And Puts May 2026

When you buy an option, you have the , but not the obligation , to trade the stock. Long Call (Bullish) Goal : You expect the stock price to rise . Right : You can buy the stock at the strike price. Risk : Limited to the premium paid.

: One standard equity option contract typically controls 100 shares of the underlying stock. buying and selling calls and puts

: This is the price you pay (as a buyer) or receive (as a seller) for the contract. If an option is quoted at , the actual cost is When you buy an option, you have the

Before placing a trade, you need to understand the basic mechanics: When you buy an option

: The predetermined price at which the stock can be bought or sold.