Call option

A call option gives its holder the right, but not the obligation, to buy an asset at a specified strike price by or on a specified date.

Strike price: The price at which an option holder may buy or sell the underlying asset. It is the fixed purchase price the call holder can exercise.
Option contract: A derivative contract granting one party the right, but not the obligation, to buy or sell an asset under specified terms. A call is one of the two basic kinds of option.
Covered call: An options strategy that pairs ownership of an asset with selling a call on it. Owning the shares covers the delivery obligation if the call is exercised.
Forward contract: A private agreement requiring two parties to trade an asset at a set price on a future date. Unlike a call, a forward obligates both parties to complete the trade.
Expiration date: The final date on which a financial contract or option remains valid. It determines when the call’s exercise right ends.
Underlying asset: The asset whose price or value determines the value of a derivative contract. The call grants a right to buy this asset.
Protective call: A strategy that buys a call option to limit losses on a short position in the underlying asset. The call can offset losses if the asset price rises sharply.
Futures contract: A standardized exchange-traded agreement to buy or sell an asset at a set price on a future date. A futures position carries an obligation rather than an option holder’s choice.
Option premium: The price paid to acquire an option contract. The buyer pays this amount upfront for the call’s exercise right.
Call buyer: The holder of a call option who may exercise its right to buy the underlying asset. This position has limited loss and potential gains as the asset price rises.

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