Call option

In finance, a call option (often simply a "call") is an option contract that gives its buyer the right, but not the obligation, to buy an agreed quantity of a particular commodity, security, or other financial instrument from the seller at a specified price. The asset or instrument to which the option relates is known as the underlying, and the specified purchase price is known as the strike price. The right may be exercisable at or before a specified date, depending on the terms of the option.

The seller, or "writer", of the call option is obliged to sell the underlying to the buyer if the buyer exercises the option. The buyer pays the seller a premium for this right. A call option gives the buyer positive exposure to the underlying asset, while the writer has the corresponding obligation if the option is exercised. The term "call" comes from the fact that the owner has the right to "call the stock away" from the seller.