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Chapter summary

When buying call options, you are speculating on an increase in price of the underlying stock.

Buying call options is a popular strategy as it is easily understood and in line with buying stocks for growth.

If your call option strategy is successful, your percentage returns can be immense.

Your risk in buying call options is limited to the premium you pay for the call option.

Time is a significant factor in a call option strategy due to the impact of time decay on the value of your option and the need for the underlying stock price to increase sufficiently before the expiry date.

There are several reasons why you might consider buying call options as your trading strategy. These include the following:


  

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