Calls

A call option gives the right to buy a stock at the strike price. Here is how buying a call works, how to find its breakeven and what happens to profits and losses at expiration, using a hypothetical Apple example.

How a call works

A call buyer profits if the stock rises well above the strike price before expiration. The most the buyer can lose is the premium paid. A call seller collects the premium but must sell shares at the strike if assigned, giving up gains above it.

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