LogFAQs > #887745047

Alternatively, you can buy a call. Which is the opposite of a put.

For example, a companies earnings are fixing to be released in 10 minutes. You think the stock is going to go up big. But you don't want to risk buying the stock outright, incase it doesn't and you're stuck with a 1,000 dollar loss within minutes.

So, you decide to buy a call for $500 instead. That's the most you could possibly lose, but you will also earn less if the stock performs well because you initially spent $500 for the rights to purchase the stock at a given price.
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