Buying And Selling Call Options Apr 2026

If the stock skyrockets, you are obligated to sell the shares at the strike price, missing out on all gains above that level.

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The stock price is lower than the strike price. buying and selling call options

The stock price is higher than the strike price.

Most brokers require a brief application to "unlock" options trading levels. If the stock skyrockets, you are obligated to

Short-term dates (weeks) are cheaper but riskier; long-term dates (months/years) give you more time to be right.

Note: Only sell "Covered Calls" (where you already own the shares) to limit risk. Selling "Naked Calls" has infinite risk and is not recommended for beginners. Limited to the premium received. 4. Key Terms to Know Learn more The stock price is lower than the strike price

You sell (or "write") a call if you think the stock will stay flat or drop. You receive the Premium upfront from a buyer.