Understanding Call Options
Call options are financial contracts that grant the option buyer the right, but not the obligation, to purchase a specific underlying asset such as a stock, bond, commodity, or other assets at a predetermined price within a specified period.
Strike Price, Expiration Time, and Strategies
The predetermined price at which the asset can be purchased is known as the strike price, while the designated time frame in which the option can be exercised is called the expiration time.
Call options can be acquired for speculative purposes or sold to generate income.
They can also be combined in various strategies, such as spread or combination.
Call options allow investors to benefit from potential price appreciation of the underlying asset while limiting their downside risk to the premium paid for the option contract.
Depending on the underlying asset’s price movement, they offer flexibility and potential profit in various market conditions.