What is a Call Option

A call option  is a financial derivative  giving the buyer of the call option the right, but not the obligation, to buy an agreed quantity of a particular stock (the underlying asset)  from the seller of the call option before the expiration date  for a fixed price called the strike price. The seller (or “writer”) of the call option  is obligated to sell the underlying stock to the buyer of the call option  if the buyer executes the option. The buyer pays a fee to the seller (called a premium) to obtain this right.