How To Buy Calls 【2026 Release】

If the earnings report had been a dud and the stock stayed at or dropped, your option would have expired worthless . Unlike a stock owner who can wait for a recovery, an option buyer has a "ticking clock"—once that expiration date hits, your $600 is gone forever.

Each share in your contract is now worth $20 more than your strike price ($420 - $400). how to buy calls

The earnings report drops, and it’s a massive success. Netflix stock surges to . Because you own the "right" to buy those shares at $400 , your contract is now "in-the-money". If the earnings report had been a dud

In this scenario, while a regular shareholder saw a ($390 to $420), your call option delivered a 233% return on your $600. The Reality Check: What if it Fails? The earnings report drops, and it’s a massive success

Your contract is now worth $2,000 ($20 x 100 shares).

Check out these guides to see these concepts in action and avoid common beginner traps: