Call options

Call options are financial contracts that give an option buyer the right, but not the obligation, to purchase a stock, bond, commodity, or other asset at a specific price. This specific price is called the strike price, and the right lasts until the option's expiration date. To gain this right, the buyer pays a fee known as a premium. If the market price of the asset rises above the strike price, the buyer can exercise the option of buying the asset at the lower price and potentially selling it at the higher market price for a profit. If the market price stays below the strike price, the buyer can let the option expire, only losing the premium paid. Call options are commonly used by traders to speculate on price increases or by investors to lock in a favorable purchase price for the future.