Investors buy call options because they expect the price of the underlying stock to increase before the expiration of the option.

Question

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Call options give the holder the right to buy the underlying stock at a predetermined price (strike price) on or before the expiration date. Investors buy call options in anticipation of a rise in the stock price, as this would increase the value of the call option. If the stock price does not rise, the investor may choose not to exercise the option and instead let it expire worthless.

Investors Buy Call Options Because They Expect the Price of the Underlying