Call Options?
In a Random Walk Down Wall Street they give an example of a call option which was:
Buying $100 of X and paying $20 for the premium. Then it goes to $200 and you profit $80, which is referred to as a fourfold increase on his investment.
From what I can understand IF the person just bought $100 of X and just held it until it reach $200 then they would profit $100. They referred to this as doubling the investment but I see the two as being different. In the first scenario they used the premium price as the investment, $20, so that’s how they got fourfold.
Other than the premium paid on the call option how is a call option different from just buying and selling the stock?
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