The price of the option is the so-called premium, which is currently $0.90. He's buying the $15 call option, which gives him the right (but not the obligation) to buy the stock at the $15 price until expiry, irrespective of the actual price. He thinks this window will give him enough time to profit if the stock extends its rally. He checks the so-called option chain of the stock and sees that the next option expiry is in 20 days. He doesn't want to miss a potential rally though, so he decides to buy a call option on the stock instead of buying it outright. Mr Chase thinks there might be still some juice left in it, but at the same time, he's afraid of a downward price correction. Mr Chase really likes a recent hot stock called Hype, whose price has gone up from $10 to $14 in a very short time. Let's have a look at how a handful of traders with different motivations can buy and sell options in the same individual equity.
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