RH Purchase @ "$91"

I purchased RH today as it declined below $90.  However, I did not purchase the standard share of stock.  I purchased a call option, which is basically the right to buy 100 shares of the stock at a certain price.  This is the first option I have purchased for the Common Cents Portfolio, and I am using it as a learning tool for potential future purchases.

I purchased a June 19 call option with an $80 strike price for $11.00.  That's a mouthful.  What this means is that I purchased the right to buy 100 shares of RH stock at $80, and I paid $11 per option/share, or $1100 total ($11/share x 100 shares = $1100).  I have to exercise (buy 100 shares at $80 a piece) or sell this option on or before June 19, or it will expire, and I will lose all of my $1100.  I will go into this more in a 101 post later.  But for now, I'll explain the purpose of options as the ability to control more shares of stock, and thus more potential for capital gains, with less money.  The downside is that its a timed bet.

My goal is to sell the options for more than $11.  To do this, RH will likely have to move above $91, which is equal to my strike price of $80 plus the $11 I paid per option/share.  Every dollar above $91 that RH's share prices increases to will equate to roughly $100 of incremental gain.  I purchased the June 19 option, because RH reports its earnings shortly before that date and usually spikes on a good earnings report.  We'll see how this timed bet works.

My traditional strategy for this trade would be to purchase RH stock below $90 and sell that chunk when it increases 7% - 10%.