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Why would someone need to use a call option? Give a scenario of why someone would...

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Finance

Why would someone need to use a call option? Give a scenario ofwhy someone would want to use one. Also, pick a stock that has acall option written on it and describe how it would benefit someonewho would purchase a call option. Showing math is required.

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3.7 Ratings (658 Votes)
Call option is an option to buy If a trader decides to exercisehis right then he will buy the shares of a company at the exercisepriceConsider an investor who is bullish expects that the stockprice will go up about the equity stock of Delia Industries Hebuys a 3month call takes a long position on the stock at anexercise price of Rs 400 by paying a premium of Rs 40 per shareThe profit diagram is as shown above He will make profit if    See Answer
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Why would someone need to use a call option? Give a scenario ofwhy someone would want to use one. Also, pick a stock that has acall option written on it and describe how it would benefit someonewho would purchase a call option. Showing math is required.

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