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Call Option

Opposite of Put Option

This is the right to buy a stock at a certain price before a specific date. A call option is for when you think the stock market will go bullish 📈. If the stock price goes up significantly before the expiry, you can exercise your option to buy it at the promised (cheaper) price and sell it immediately to the stock market.

  • Max Profit: Limitless
  • Max Loss: Call Options Exercising Premium
  • Break-even point: Exercising Price + Premium
    • Call Options Exercising Premium + Promised Price ≤ Market Prices

Links to This Note

Put Option

Opposite of Call Option

Hinge Fund

... resort membership and put a Call Option on the resort stock. He ...

Finance

- Call Option

Black-Scholes Model

... Black-Scholes formula for a European Call Option $C$ (an option that can ...