How To Buy — Calls

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

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" how to buy calls

In this scenario, while a regular shareholder saw a ($390 to $420), your call option delivered a 233% return on your $600. The Reality Check: What if it Fails? Instead of buying 100 shares for a steep

If the earnings report had been a dud and the stock stayed at or dropped, your option would have expired worthless . Unlike a stock owner who can wait for a recovery, an option buyer has a "ticking clock"—once that expiration date hits, your $600 is gone forever. If the earnings report had been a dud

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