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To put it all together, then: If a trader buys the March 655-strike call on stock ABC, that means he is paying for the right to buy shares of ABC between now and March expiration. (An American option can technically be exercised prior to expiration, though that would only be done in rare situations).

## Call and Put Options | Brilliant Math & Science Wiki

Call buying is the simplest way of trading call options. Novice traders often start off trading options by buying calls, not only because of its simplicity but also due to the large ROI generated from successful trades.

### Call Put Tips – Nifty Option Tips, Intraday Tips, Stock

Options have becoming an increasingly important part of the financial markets, and they can be a powerful tool in many different situations. But how exactly do they work?

#### Option Types: Calls & Puts

Hi Achu,

A double option is an option combination of a call and a put with an or condition. That is, the buyer (holder) of the double option decides if s/he will buy the underlying or sell the underlying when the decision to exercise is made. Obviously s/he cannot do both, so when one exercise choice is made the other side is automatically cancelled.

An option is a financial derivative on an underlying asset, and represents the right to buy or sell the asset at a fixed price, at a fixed time. As options offer you the right to do something beneficial, they will cost money. This is explored further in Option Value , which explains the intrinsic and extrinsic value of an option.

A call option is ideal for you. Depending on the availability in the options market, you may be able to buy a call option of Reliance at a strike price of 975 at a time when the spot price is Rs 955. And that call option was quoting Rs. 65, You end up paying a premium of Rs 65 per share or Rs 6,555 (Rs 65 x 655 units). You start making profits once the price of Reliance in the cash market crosses Rs 985 per share (., your strike price of Rs 975 + premium paid of Rs 65).

If the call option is out of the money at the expiration date then the strike price will be higher than the current market price - so you would be better buying the stock directly via the exchange.

Consider buying calls in the following situations:
6. You believe that the underlying will move up more than the implied volatility.
7. You believe that the underlying will move up and that volatility will increase.
8. You believe that the underlying will move up more than the cost of theta.