Call Option
A call option is a derivative contract granting the right, but not the obligation to the holder, to buy an underlying asset—shares, commodities, or currencies—at a set price before a deadline. It has three key parts: the premium (the cost to purchase the option); the strike price (the agreed-upon price for the asset) and the expiration date, after which the option becomes worthless if unused. Buyers pay the premium for potential profit if the asset’s price rises above the strike, while sellers pocket it, betting the price stays below.
Related Terms
Common Stocks
Common stock is a type of share that grants the holder the right to a...
Block Trade
A block trade is a large buy or sell order for a stock, commodity, or...
Index Futures
Index futures are derivative contracts tied to an underlying index, such as Nifty Bank, Finnifty,...
Growth Stocks
Growth stocks are shares in companies expected to outpace the broader market, driven by robust...
Commodity
A commodity refers to physical goods and raw materials such as aluminium, cotton, copper, sugar,...
Box Spread
A box spread is an options trading strategy combining a bull call spread and a...
