Lightwave Logic Inc (LWLG)

[Slim_Jim]

Bruinfan4ever -
Bottom line is you are hoping the price eventually is above $20 if/when you exercise your right to purchase before or at the expiration date, and then you should make money depending on what the current price is on that day and how much of a premium you paid to buy the call option and of course broker fees. You're never obligated to buy those shares at $20 you just have the right to buy them.

Like dwagom04 said there are some good resources online if you're interested in calls or puts.

Some people buy them to "hedge" or protect themselves just in case the price goes south of $20, or maybe they just want to put up some of the funds (the premium) and pay the rest at the exercise date.
There are a variety of reasons. A person/institution "short" on the stock may buy them to hedge their position.