Glossary · from the DESK dictionary
Call Option
The right (but not the obligation) to buy an underlying asset at a fixed price.
In plain words
With a call, you're betting a price will rise. You pay a premium in exchange for the right to buy the underlying at the strike.
In more detail
A call gives the buyer the right, but not the obligation, to buy the underlying at the strike price by (American option) or on (European option) the expiration date. The seller (writer) takes on the obligation to deliver in exchange, if the buyer exercises.
Example
A call on Apple with a $200 strike gives you the right to buy 100 shares at $200 each, no matter how high the actual price is.
What it means for traders
A basic building block of nearly every options strategy — from simple directional bets to complex spreads.
Common pitfalls
The buyer's maximum loss is the premium paid; for the uncovered seller (naked call), it's theoretically unlimited.
Related terms
Bull Call Spread · Buy to Open · Convertible Bond · Covered Call · Delta (Δ) · Derivative · Premium (Option Price) · Put Option · Ratio Spread · Strike (Strike Price)
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.