Example: Conventional stock vs. Call Option on a stock

Example 1: Call option on stock

Your call option has a strike price of 10 Euro. The underlying stock has a price of 10 Euro. So if you exercise your call option now you could buy the underlying stock for the market price. Therefore you make no profit. However, you make a loss of 1 Euro if the call cost you 1 Euro.

Example 2: Conventional stock

Stock bought for 10 Euro. So your return is 1 Euro if the stock price reaches 11 Euro.