Finance glossary
Call Option
Definition
A contract giving the right to buy an asset at a set price before expiration.
A call option gives the holder the right, but not the obligation, to buy an underlying asset at the strike price before expiration. Buyers profit when the price rises above the strike plus premium. Calls are used to bet on upside or to gain leveraged exposure with limited downside.
In a sentence
He bought a call option, betting the stock would climb above the strike before it expired.
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