What is a Call Option?

A Call Option is a derivative agreement between two parties which gives the buyer the right to buy from the call option seller any asset like a stock, bond, commodity etc. at a specific time and price. One earns a profit on a call when the price of the underlying asset increases. A Call Option basically gives the right to call in or buy an asset.  The seller has to sell the asset when the buyer chooses to exercise the call option at the previously decided strike price.

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