Short-Term Call Options
When
an option trader buys a call option, trader has the right to buy the underlying
at strike price before expiration. Keep in mind that just because the option
trader has the right to buy the stock, doesn’t mean that trader has to
necessarily do so. The call option just like a put option can be sold anytime
up until expiration for a profit or loss
Bull Call Spreads
When
implementing a bull call spread, an option trader purchases a call option at
one strike and sells the same number of calls on the same stock at a higher
strike with the same expiration date.
By
implementing a bull call spread, traders can hedge their bets limiting the
potential loss. This is the advantage when comparing to purchasing a call
outright. Remember that there are no sure-fire ways to make money by using
options. However, knowing and understanding the strategy is a good way to limit
losses.
Long-Term Call Options
The
long call option strategy is the most basic option trading strategy whereby the
options trader buys call options with the belief that the price of the underlying security will rise significantly beyond the strike price before the option expiration date.