Buying calls as a stock alternative

 

Call options strategies

Buying calls as a stock alternative

Buying a call option is often considered a bullish strategy because the price of the call option typically rises when the price of the underlying security rises. Similarly, call prices typically fall when the underlying security falls. The premium paid for an option is typically a fraction of the price of the underlying asset. Traders or investors who have a directional view might consider buying a call option as a lower-cost alternative to buying a stock outright.

It's important to remember that options expire, unlike stocks. If a trader buys an option and it expires worthless, they lose the entire investment. Additionally, options don't carry voting rights, and they don't pay dividends.