call option
/kɔːl ˈɒpʃən/
a contract giving the buyer the right, but not obligation, to purchase shares at a set price before expiration
call option in a sentence
“He bought call options on the stock ahead of earnings, expecting a positive surprise.”
Origin of call option
From the right to call (demand delivery of) the underlying asset
Related Words
put option
a contract giving the buyer the right, but not obligation, to sell shares at a set price before expiration
strike price
the predetermined price at which an option holder can buy or sell the underlying asset
premium
the price paid to purchase an options contract
implied volatility
the market's forecast of likely future price movement, derived from current option prices
delta
the rate of change in an option's price relative to a $1 move in the underlying asset
theta
the rate at which an option loses value each day due to the passage of time; time decay