Buying a stock option call gives you the right but not the obligation to buy an underlying stock. When you buy a call option you have no obligation to buy the underlying stock. If you buy choose to exercise that right, you have to do it within the expiration period and at the given strike price.

The amount of premium that you pay to buy a call stock option is the risk that you are undertaking. The rewards could be potentially unlimited.

← previous tip                                              next tip →