Derivatives
Call Option
Definition
What is Call Option?
An option giving the holder the right to buy the underlying asset at the strike price.
Example in practice
How This Looks in Practice
A call gains value when the share rises well above the strike price.
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Related Terms
Derivatives
Derivative
A contract whose value depends on an underlying asset, rate, index, or event.
DerivativesUnderlying Asset
The asset, rate, index, or reference on which a derivative's value is based.
DerivativesNotional Amount
The reference amount used to calculate derivative payments, which may exceed the cash initially exchanged.
Derivatives StrategiesCovered Call
A strategy that owns the underlying asset and sells call options against it.