Buying And Selling Call Options May 2026

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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 buying and selling call options

The stock price is higher than the strike price. AI responses may include mistakes

You sell (or "write") a call if you think the stock will stay flat or drop. You receive the Premium upfront from a buyer. Selling "Naked Calls" has infinite risk and is

A is a contract that gives the buyer the right (but not the obligation) to buy 100 shares of a stock at a specific price ( Strike Price ) before a certain date ( Expiration ). 2. Buying Call Options (Bullish)

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

The stock price is lower than the strike price.