Chapter 06 · Section 6.1

Profit Potential

Buy Calls
Market Outlook   : BULLISH
Profit Potential :
Loss Potential   :
Breakeven Point  :

The investor's profit potential is:

a) unlimited.
Yes. The investor's profit is the intrinsic value of the call less the amount paid for the option - the market price less the exercise price less the premium. The greater the increase in price of the underlying, the greater the investor's profit. Continue
b) limited.