If a stock is currently $10 and I believe it's going to go up to $20 in 1 month. I will buy 100 put options with premium $1 at strike price $11. I need to pay $100 for the options, and when the stock goes to $11 I have the right to buy a 20$ stock at $11.

Does that mean I have to spent an addition $11*100 = $11,000 so I can buy the stock in order to sell it at $20000? Or does me paying $100 give me 100 shares of $11 stock?

Answer rating: 100% (QA)

Call Option It means the option holder has a right to buy at the strike price The option holder i... View the full answer