Trading: Call Option

A call option gives you the right, but not the obligation to buy an underlying asset at a set date in the future.

 

When you buy a call option, you pay a premium for the contract, the premium is the initial outlay and total loss you can incur on the trade.

 

A call option is a bullish position on the market it is placed on. The benefits of using a call option is the ability to gain a leverage exposure to a stock with a predefined maximum lost which is the premium.

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