Current location - Trademark Inquiry Complete Network - Futures platform - What is the risk-return relationship of buying call options?
What is the risk-return relationship of buying call options?
The relationship between the risks and benefits of buying call options is as follows:

1. Risk: The risk of buying a call option is limited, because you only need to pay the option fee (the price of the option). If the underlying asset price is lower than the exercise price of the option when the option expires, you will only lose the option fee paid. This means that your biggest risk is the cost of buying options.

2. Benefits: The potential benefits of buying call options are unlimited. If the price of the underlying asset is higher than the exercise price of the option when the option expires, you can make a profit by exercising, and the profit will depend on the actual price of the underlying asset. So you can get the profit corresponding to the rise of the underlying asset when the asset price rises, without holding the actual asset.

Buying call option is one of the basic option strategies and the mainstay of many strategies.

Call options have the following characteristics:

0 1 has rights but no obligations.

To buy a call option, you can get the right to buy the underlying asset at a fixed price (or give it up) only by paying the corresponding royalty, without other obligations; So the loss of buying call options is limited, and the biggest loss is the premium of options; Its potential upward income is infinite in theory, and with the increase of the price of the subject matter, the income will expand accordingly.

02 lever amplification

Buying a call option is different from buying a futures option. You don't need to pay a deposit to buy options, but only need a premium that is the same number of hands lower than the futures price, which increases the leverage while retaining profit opportunities.