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Call or put option definition 95%
What is a Call Option. This contrasts to a put option, which is the right to sell the underlying stock. More specifically, a put option is the right to SELL 100 shares of a stock or an index at a certain price by a certain date. You profit on a call when the underlying asset increases in price. These are tax management, income generation and speculation. The call option writer is paid a premium for taking on the risk associated with the obligation.For stock options, each contract covers 100 shares.
Note: This article is all about call options for traditional stock options. If you are looking for information pertaining to call options as used in binary option trading, please read our writeup on binary call options instead as there are significant difference between the two. Buying Call OptionsCall buying is the simplest way of trading call options. N.