What is Call Option?

Answer 1

A contract that gives the holder the right to purchase a
specified quantity of the underlying asset at a
predetermined price (the exercise price) on or before a
fixed axpiration date

Answer 2

A call option is a financial contract between two parties, the buyer and the seller of this type of option. The buyer of the option has the right, but not the obligation to buy an agreed quantity of a particular commodity or financial instrument (the underlying instrument) from the seller of the option at a certain time (the expiration date) for a certain price (the strike price). The seller (or "writer") is obligated to sell the commodity or financial instrument should the buyer so decide. The buyer pays a fee (called a premium) for this right.

The buyer of a call option wants the price of the underlying instrument to rise in the future; the seller either expects that it will not, or is willing to give up some of the upside (profit) from a price rise in return for (a) the premium (paid immediately) plus (b) retaining the opportunity to make a gain up to the strike price (see below for examples).

Call options are most profitable for the buyer when the underlying instrument is moving up, making the price of the underlying instrument closer to the strike price. When the price of the underlying instrument surpasses the strike price, the option is said to be "in the money."

The initial transaction in this context (buying/selling a call option) is not the supplying of a physical or financial asset (the underlying instrument). Rather it is the granting of the right to buy the underlying asset, in exchange for a fee - the option price or premium.

Exact specifications may differ depending on option style. A European call option allows the holder to exercise the option (i.e., to buy) only on the option expiration date. An American call option allows exercise at any time during the life of the option.

Call options can be purchased on many financial instruments other than stock in a corporation - options can be purchased on futures on interest rates, for example (see interest rate cap) - as well as on commodities such as gold or crude oil. A call option should not be confused with either Incentive stock options or with a warrant. An incentive stock option, the option to buy stock in a particular company, is a right granted by a corporation to a particular person (typically executives) to purchase treasury stock. When an incentive stock option is exercised, new shares are issued. Incentive stock options are not traded on the open market. In contrast, when a call option is exercised, the underlying asset is transferred from one owner to another.

Answer 3

A call option is a financial contract between two parties, the buyer and the seller of this type of option. Often it is simply labeled a "call". The buyer of the option has the right, but not the obligation to buy an agreed quantity of a particular commodity or financial instrument (the underlying instrument) from the seller of the option at a certain time (the expiration date) for a certain price (the strike price). The seller (or "writer") is obligated to sell the commodity or financial instrument should the buyer so decide. The buyer pays a fee (called a premium) for this right.

Answer 4

A call option is a derivative instrument that has some features: it has a support asset (usually a security: stock for example) traded on the spot market, a maturity date (ex: 3 three months from now on) and a fixed price (called exercise price) for the support asset (the stock).
This call option is traded on futures market, and gives you the right but NOT the OBLIGATION to exercise your right at maturity date. For example, if the stock's price at maturity is higher on the spot market, then you could exercise your call option and buy the stock at the exercise price (from the call option).
Anyway, in order to get a call option, you will pay a premium (no matter if you exercise the option or not). I hope my answer helped you. For further question...

Answer 5

Call option
An option contract that gives its holder the right (but not the obligation) to purchase a specified number of shares of the underlying stock at the given strike price, on or before the expiration date of the contract.

Answer 6

Call options rock. However, before you think this is an easy way to make money, be advised that about 70-75% of them expire worthless.

Answer 7

An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.

Answer 8

a contract betweena buyer & seller whereby the buyer has a right but with not the obligation to buy at an sgrred quantity of the product while the seller is obligated to sell the product should the buyer decide at fee (premium) to be paid by the buyer.

Answer 9

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Answer 10

The option to call your mom, darsh!