Call Option
A contract that gives the buyer the right (not obligation) to buy the underlying at a strike price.
Quick facts
| Field | Value |
|---|---|
| Category | Options Trading Terminology |
| Use | Learn vocabulary to read chains and manage risk |
Definition
Buying a call expresses a bullish view. The maximum loss is typically the premium paid (for plain long calls). Selling a call collects premium but carries risk if price rises strongly.
Quick example
Info
Example: Buy a 100 strike call; if underlying rises above 100, the call gains value.
Where you’ll see it
- Option chain (strikes/expiries/OI/volume)
- Order window (market/limit/SL)
- Positions page (P&L and Greeks)
Common confusion
Avoid treating a single term as a “signal”. Terms help you describe risk; decisions should come from a complete plan (view, sizing, exits, and liquidity).
Summary
- A contract that gives the buyer the right (not obligation) to buy the underlying at a strike price.
- Use this term to communicate risk and intent clearly.