Business, Legal & Accounting Glossary
A call option is an option contract that gives the owner (also called the buyer or holder) the right to buy (or “call”) a fixed amount of an underlying security at a stated price within a specified period of time. The owner of a call option has the right to call the security away from the option writer (seller) at a fixed price called the exercise or strike price. The writer of the call option is obligated to sell the security at a fixed price to the option holder if the holder of the call option chooses to exercise the call. An investor who is long a call option has the right to buy the underlying security, while an investor who is short a call option has an obligation to sell that security. A call option holder who exercises the call option will receive 100 shares of the underlying security.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Call Option are sourced/syndicated and enhanced from:
This glossary post was last updated: 4th February, 2020