The Bull

Tuesday 22

May, 2018 6:42 AM



Call option

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What does it mean?

A call option gives the owner the right, but not the obligation, to buy the underlying shares at a specific price (the strike price) at or before a specific date (the expiry date)..


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TheBull says...

The buyer of a call option wants the price of the underlying instrument (such as a share) to increase in the future. The seller of a call option is happy to give up the winnings from a price rise in return for the premium, which is paid immediately. The seller still has the opportunity to profit from the transaction should the price fall.


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