Series 65: 5.3.4.6.2 Calls

5.3.4.6.2  Calls

Calls, which give an investor the right to purchase a security in the future at a certain price, can be used in a couple of ways to minimize the risk associated with not being fully invested in a market at a given point. Since calls can be purchased relatively cheaply in a falling market, investors who are feeling optimistic that a turnaround is coming but are afraid to invest their funds can still profit by investing a small portion of their funds into calls. Through this small investment in a call, investors can create the opportunity to profit from an upswing without having to risk inv