A Beginner’s Guide to Call Buying
The popular misconception that 90% of all options “expire worthless” frightens investors into mistakenly believing that if they buy options, they’ll lose money 90% of the time. But in actuality, the Cboe Global Markets (Cboe) and the Options Clearing Corporation (OCC) estimate that as of their research, only about 23% of options expire worthless, while 7% are exercised and the majority, just under 70% are traded out or closed by creating an offsetting position.
Key Takeaways
- Buying calls and then selling or exercising them for a profit can be an excellent way to increase your portfolio’s performance.
- Investors often buy calls when they are bullish on a stock or other security because it affords them leverage.
- Call options help…
