Investing Dictionary
Options & Bonds

What is Call Option?

A contract giving you the right to buy a stock at a set price

Full Explanation

A call option gives you the right (not obligation) to buy 100 shares of a stock at the "strike price" before the expiration date. If the stock rises above the strike price, your call gains value.

Real-World Example

Buy a $150 call on Apple. AAPL rises to $175. Your call is worth at least $25 per share.

Pro Tip

Options can expire worthless. Never put money in options you can't afford to lose completely.

Related Options & Bonds Terms

Credit Rating

A grade for how likely a borrower is to repay their debt

Expiration Date

The last day an option can be used

Implied Volatility

The market's expectation of how much a stock will move

Put Option

A contract giving you the right to sell a stock at a set price

View all Options & Bonds terms →

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