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CALL
OPTION
Call Option is a kind of Financial Contract. The contract speaks about the ability
of owner to buy the stock at agreed price on agreed time. This gives the owner right to
buy the stock but it is not an obligation.
On expiration date, the Call Option becomes worthless and the owner has to
carry a loss equivalent to the amount he paid as Call Option Premium.
It is opposite to Put Option, where the owner
gets a right to sell the stocks. |