Session 8 discussion was primarily on Cephalon, Inc.

The discussion primarily centred around call

options, buying and selling them and all the concepts related to this particular topic. After sir
explained the concept of buying a call option, I asked sir why would a person buy a call option on a
stock instead of buying the stock of the firm directly?

Sir replied that buying a call option magnifies the profit. You can buy a call option on more number
of stocks than you can buy the stocks directly with the same amount of money. Hence when the
price of the stock increases beyond the agreed upon price, the profits also increase much more if
you posses a call option than stock of the firm in the question.

This was my contribution to the discussion in the class.