That about sums it up.This quote is hidden because you are ignoring this member. Show Quote
Simply put, you buy a share because you think it's going to go up at some point in the future. You'd buy a call option for the same reason, but you have to correctly estimate the minimum amount the share price will go up, and by when. If it doesn't go up by the amount that you think it will, by the date the option closes, it's worth $0 (and as the date draws closer, if it's not going to hit the strike price, the value of the option drops rapidly, so it's hard to unload to mitigate losses). This is also a simplified and narrow explanation, but I think it's as deep as you want to go for now haha.