Crypto Terms: Letter C

What is Call Option?

Call Option MEANING:
Call Option - a financial contract that gives the buyer the right but not the obligation to purchase an asset at a set price.
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Let's find out Call Option meaning, definition in crypto, what is Call Option, and all other detailed facts.

A call option is a financial contract between the buyer and the seller. It gives the buyer a right to buy a certain asset, bond, commodity, or other purchase in question at a specific price within a pre-established timeframe. However, this contract is not an obligation.

The price set in the call option is known as the strike price. The time frame to conduct the sale is referred to as the expiration date. Call options can be bought for speculation purposes or sold for income purposes. They can be used along with spread or combination strategies.

In a typical call option contract, an investor is given the opportunity to purchase a certain quantity of the asset for a set strike price until the expiration date. For example, one could purchase 100 shares at $25 with the expiration date set at six months. If the value of the company’s shares changes, the price of the option contract will adjust accordingly.

The call option buyer has the choice to hold the contract until the expiration date. They may sell the contract before the expiration date at the market price set at the time of such sale. Additionally, the buyer can choose to wait out the expiration data and accept delivery of the stock shares.