Call option

This is a feature in a contract between a buyer and seller that allows the buyer to purchase a specific stock at a fixed price until a pre-defined expiration date. A call option gives the buyer the right, but not the obligation, to purchase the stock, enabling them to potentially profit if the stock's market price rises above the fixed price (called the strike price) during the contract period. The buyer pays a premium to the seller for this right. For example, if a stock's current market price is $100, and the buyer purchases a call option with a strike price of $110 for $5, they can exercise the option if the stock price exceeds $115 (strike price + premium). If the price remains below $110, the buyer can let the option expire, losing only the premium paid.