This process, identified as leverage, offers you a chance to take on additional threat and attain a lot more publicity for possible gains with a lot less funds upfront. But leverage really should not be taken lightly, as that more risk signifies you have a larger opportunity to shed The cash you've got invested. Additionally you have to meet sure needs to margin trade.
If the stock drops down below click here the strike value, your option is in The cash and you may make the most of it. Normally, you'd forfeit the high quality and walk absent.