Traders using options get extra leverage on their investments. For example, suppose that a stock price is $32 and an investor who feels that this price will rise buys call options with an exercise price of $35 for $0.50 per option. If the price does not go above $35 during the life of the option, the investor will lose $0.50 per option (or 100 percent of the investment). However, if the price rises to $40, the investor will realize a profit of $4.50 per option (or 900 percent of the original investment). LO.1