The benefit of stock options trading is that it requires less money than buying stocks. second thing for any stock option is that a stock may rise upward in price by 1% and the same price movement will cause the option to rise in price by 10%. In stock options trading the traders can make money when stocks price rise without buying the shares.
Buying Call Option …
A Call Option gives the right but not obligation to buy shares of a stock at a specified price on or before the expiry date.
Advantage of buying calls option
- Allows you to participate in the uptrend of stocks without having to own stocks.
- You only have to risk a small sum of money. The maximum amount you can lose on a trade is the cost of the call.
- Higher potential investment returns.